The Work and Pensions Secretary Iain Duncan Smith made an extraordinary claim this week, when he said that most people want to work past age 65.
Is this really the case?
He made reference to improved life expectancy which means that more people want and need to work for longer before retiring.
In our experience, most people want to have the option to retire as soon as they can afford it.
Whilst the nature of retirement has changed significantly over the years, with more people opting to reduce their work commitments gradually rather than stop working entirely on a single day, the desire to be able to enjoy retirement at a reasonable age remains largely unchanged.
We believe that the definition of an ‘early’ retirement is likely to change in the future. At the moment, an early retirement is generally considered to be retirement at any time before your 65th birthday for men or 60th birthday for women.
As the state pension age starts to increase, initially to 66 for both men and women by the end of this decade and then onwards to age 68 and higher in the future, an ‘early’ retirement could well come to mean the ability to retire any time before the new state pension age.
Assuming occupational pension schemes maintain their normal retirement ages at 65, we also expect to see the need for continuing to work until the higher state pension age is reached, at least on a part-time basis, becoming more popular.
The need to fill the gap between the receipt of occupational or personal pension income and the receipt of a state pension will require careful planing to ensure the first few years of retirement are not spent rapidly depleting life savings.
Photo credit: Flickr/Steve Punter
