A million pensioners forced to keep working

older worker at computerFrank May/DPA/Press Association Images

Labour Market Figures from the Office for National Statistics have revealed that 959,000 people who have reached the retirement age of 65 are still at work. And the number keeps growing: this is 100,000 more than this time last year.

So why are they still working, and will you ever be able to retire?
The figures mean that almost 10% of all people over the age of 65 still work - despite the fact that men are eligible for their state pension, and women would have been able to claim their pension for more than three and a half years.

So why are they working?

The figures reflect Aviva's regular research on the subject, which actually show 23% of those aged 64-75 are still working - which is up from 18% when the report launched three years ago.

Clearly the struggle to meet monthly outgoings is part of the reason. The Aviva report found that the over 55s are cutting back. Despite annual inflation of 2.74%, average outgoings are £1,231 a month down from £1,300 at the same time last year

Dr Ros Altmann, Director-General of Saga, says: "Those coming up to retirement may be finding their private or state pensions are not as good as they had hoped - meaning they have to stay at work if they want a reasonable income. This may be especially true for women who may have returned back to work from taking time off and have very little pension provision."

Is this so bad?

Altmann argues that working later may be no bad thing. She says: "In many ways, it is great news to see such a significant increase in the number of over 65s in employment. Many older people are increasingly choosing to stay at work, often part-time so that they ease more gently into retirement. If they feel fit and healthy and want more money, and are able to work, they are choosing to do so."

"By keeping more over 65s economically active, we will be improving the medium term job prospects for the economy, since millions of older people pulling out of the labour force with inadequate pensions would leave less money to spend on leisure, services and consumption which ultimately means fewer jobs and lower growth. A social revolution seems underway, the more who embrace these opportunities, the better for all of us.''

Will you be able to afford to retire?

It seems, therefore, that this trend is only going to increase. The fact that we can't be forced to retire because of age, coupled with shrinking company pensions, annuity rates in freefall, and the fact that the state retirement age is increasing, means we can expect to keep on working well into our 70s.

In less than two decades, the state pension age will have risen beyond 68, and could well be knocking on the door of 70.

There will be those who see this as a tremendous opportunity to keep doing a job they love and maintaining their lifestyle. However, there will be those who are counting the seconds to retirement and see this as a horrible development. But what do you think? Let us know in the comments.
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