We have to put retirement off for seven years

For working people, the prospect of retirement is retreating further into the distance every day. Researchers claim that people in work right now expect to work seven years longer than today's retirees before they can afford to stop work. That's a total of 37 years in the workplace - compared to retirees of today, who spent an average of 30 years at work.

The HSBC report into the Future of Retirement discovered that these longer working lives will kick in, despite the fact that young people start saving for retirement earlier - at an average age of 26 instead of 29.

Alarming minority

It also discovered a significant minority who are decidedly less well off. More than one in five people currently in work have not started saving for retirement, and of those who made a start, 28% either had to stop because their circumstances changed, or they faced financial difficulties as a result.

These people will only be able to dream of retirement at the age of 63. They will have to wait for their state pension in their late 60s or 70s - before retiring on far too little cash to be comfortable. They are likely to make up some of the 23% who expect to work as long as they can in retirement, and the 22% who expect to release equity or downsize.

Why?

The authors of the report stressed the importance of saving as much as possible, as early as possible. However, it also identified just why people are struggling to do this. Those in their 20s are wrestling with student debts and getting on the property ladder, while those in their 30s and 40s are most likely to be supporting other people financially - in fact almost two thirds of people in their 40s are doing this.

Instead of having cash left over to save for retirement, they are having to borrow. The study found high levels of borrowing across the generations, but the highest were among people in their 30s - 78% of whom have borrowed money.

What can you do?

Unfortunately, the report doesn't come up with a brilliant solution. It simply encourages people to think very seriously what their life will be like in retirement - then decide whether there are any sacrifices or compromises they can make in terms of their current lifestyle - in order to avoid the worst of the possible hardships of retirement.

This is a tough sell. Working people of every generation are working all hours - yet dealing with pay freezes and cuts. They are struggling with a rising cost of living, insane property expenses, the pressure of debt, and the burden of financially supporting those around them. It's hard to convince anyone in this position that they need to cut back even harder for even longer, in order to be marginally better off in 30 years' time.