More than a third (36%) of people in their 60s who have yet to retire say they will need to work longer as a direct result of the planned State Pension age rise.
Nearly two in five (38%) of 60-65-year-olds say they are working for longer to cover day-to-day expenses.
New research from the Standard Life Centre for the Future of Retirement showed that financial pressures are a major factor behind an increase in later-life working, alongside those who continue working by choice.
It warned that the figures may increase if reported government plans to raise the State Pension Age to 68 more quickly are implemented. Under longstanding plans it was due to gradually rise to 68 between April 2044 and April 2046, affecting those born between April 1977 and April 1978.
However, the possibility of an acceleration of State Pension Age rises was highlighted after reports that Treasury officials have told the Office for Budget Responsibility (OBR), the government’s fiscal forecaster, that the “current policy” is to bring the increase in the retirement age forward by at least seven years, to 2037. This would mean that many people would have to wait longer for their State Pension.
That comes against a backdrop of widespread under-saving in the UK, with more 15m people not saving enough for retirement, according to research from the Department for Work and Pensions.
Catherine Foot, director of the Standard Life Centre for the Future of Retirement, said: “Working later in life can offer real financial and social benefits, particularly when it reflects personal choice. Yet for many people, this isn’t a lifestyle decision but a financial necessity.
“Millions across the UK are unable to retire when they want, underlining the challenge of retirement adequacy and the need for longer working lives just to bridge the gap.”
Following the State Pension age starting to rise to 67 in April, more than a third (37%) of 60-65-year-olds who are still working say they are delaying retirement until they can receive the State Pension, with the State Pension comprising a significant proportion of most people’s retirement incomes.
Previous Standard Life research also found that one in six (16%) retirees have either gone back to work (8%) or are thinking of doing so (8%), as the inadequacy of their retirement finances becomes clear.
Ms Foot said: “To make working in later life as accessible as possible, we need expanded, age-tailored careers support, alongside better flexible work arrangements and improved access to in-work health support.”
She warned that many will not be able to continue working, even with better support, particularly those with long-term health conditions and unpaid carers, who are financially disproportionately affected by the rise in State Pension age.
She added: “Alongside improving wider pensions adequacy, the government must set out a clear plan to ensure the most vulnerable are supported before and during retirement, mitigating the negative impact of further changes to the State Pension age on their financial security.”
• Research conducted for the Standard Life Centre for the Future of Retirement by Public First among 3,030 UK adults aged 60-69 between 9-26 February.