Over 50s in the UK avoiding retirement due to state pension age changes
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L&G contributes this dramatic rise to substantial increase in the amount of people in their sixties living and working for longer, which has come about as a result of changes to the state pension age. The new report from L&G and the Centre for Economics and Business Research (Cebr) found that 47 percent of all over 50s are predicted to be part of the UK’s workforce. In 2020, the number of people over the age 50 in work rose to 42 percent, a sharp rise from the 31 percent increase in 1992.
Comparatively, the number of people remaining in work under this age has remained relatively steady over the 30 years.
As a result of this, there has been a significant increase in the narrowing of the gap in employment rates between the under and over 50s from 42 percentage points in 1992 to 35 percentage points in 2020.
This is expected to continue to drop to 29 percent by 2030, according to L&G and Cebr’s report.
Those in the 60s were the primary age demographic to continue to work, with their employment rate jumping “twofold” over the last two decades.
Currently, the state pension age stands at 66 years old and is available to men born on or after April 6, 1951 and any woman born on or after April 6, 1953.
Claimants usually need at least ten qualifying years on their National Insurance record to get any state pension, however these ten years do not need to happen consecutively.
As of today, the full new state pension is £179.60 per week. A higher amount can be given to claimants if they have over a certain amount of additional state pension or have delayed getting it.
In April 2021, claimants received a 2.5 percent increase in their payments of the new state pension.
Despite the pension age being 66 (with further rises in the pipeline), L&G found that many Britons are deciding to work long past the state retirement age.
Some eight percent of people over 66 currently are in work, and those in work put in an average of 26 hours a week.
This is expected to jump to a record 11 percent by 2030, which comes to an estimated 948,000 people.
On top of this, the number of people who are past the state pension age is expected to continue to rise if further changes to the age threshold are implemented.
Andrew Kail, CEO of L&G Retail Retirement, believes the drastic changes with people staying in employment for longer are due to a variety of factors.
He explained: “Our research demonstrates a significant cultural shift in the world of work.
“People are continuing to work for longer, in order to reach their desired retirement lifestyle but also in response to changes in wealth, state pension provision and to reflect the fact that we are living longer as a society.
“This creates a much more challenging hurdle for people to overcome in order to fully retire.
“Gone are the days of ‘carriage-clock retirement’ and we need to make sure people understand the implications so that they can better plan for their future and the extent to which work will play a role in it.”
As a response to this, Mr Kail shared how L&G is providing support to people concerned about how these changes are affecting their retirement.
He added: “For those worried about their finances and the implication it has on when they might retire, it is better to be aware of the options available than bury your head in the sand.
“To encourage people to do this easily, Legal & General has a free online course with The Open University, setting out a series of stepping stones to a financially secure retirement and producing a series of podcasts, called ‘Rewirement’, to help listeners get the best from their later years.”
Those interested in starting to claim their state pension can put forward their application through the Government’s website.
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