'Delay retirement to boost pension', says expert

Golden nest egg in bird's nest with the word retirement on torn paper. Retirement savings concept.Pic: Getty Images

Staying in work for an extra two years could help boost your pension by almost 25 per cent, according to a report by pensions campaigner Dr Ros Altmann.

The report, written in partnership with financial services provider MetLife, suggests that remaining in full-time work for two years beyond retirement age, and then taking on a part-time job for a further three years could increase a £100,000 retirement pot by £23,865.

And according to Dr Altmann, just one extra year of full-time work and two years working part-time could add a worthwhile 11 per cent to your pension, giving extra time to pay mortgages off and earning more interest.

Dr Altmann claims only one fifth of workers are confident about having enough in their pension pot to pay the bills in old age, and 70 per cent would happily remain in work to increase their nest egg.

She told the Daily Express: "As the proportion of people's lives spent working has fallen so much, the failure to move retirement thinking to match developments in health and life expectancy has left pension planning dangerously out of date.

"The retirement of the future will be one where people cut down work gradually and work part-time before finally stopping. They may keep working full-time until their early or mid-60s, but then start to cut back."

With life expectancy now at an average of 86, government reforms have been introduced that mean many of those currently in their early 20s will not be able to collect a state pension until they are 70.

Further reforms that come into force in April 2015 will allow anyone over 55 to spend their pension pot however they want, a move which it is hoped will result in a greater variety of retirement products coming onto the market.

What do you think? Would you be happy to work an extra few years to ensure a comfortable old age? Leave your comments below..
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