Half of UK Workers Aged 40-64 Won’t Have Enough Money to Retire

Half of all workers aged 40-64 – nearly eight million people – do not expect to have enough money to stop work and retire when they reach their State Pension Age, according to new YouGov research for the Charity Age UK.

Published today to launch Age UK’s new public policy paper ‘Creating a career MOT at 50’, the new research highlights the difficulties facing many workers who cannot afford to down tools when they become eligible for their State Pension.

The Charity is calling for government action to help people plan their later working lives and explore how they can put enough money aside for the future while there’s still time to make a difference.

Age UK’s new public policy paper highlights next steps and recommendations for government.

While a third (35%) of those surveyed expect to be working the same hours in their current job in their late 60s, a quarter (25%) expect to be working fewer hours in their current job, and just over a fifth (21%) do not expect to be working in their current job at all by this point.

Of all those who expect to stop working or to reduce their hours before their late 60s, just under a quarter (23%) cited poor health as the likely reason, while over a quarter (28%) felt their job would be too physically demanding at that stage.

Only 17% of those who expect to stop working said that this is because they would be financially secure enough to give up their job.

Having a career MOT at the age of 50 appealed to around half (51%) of those surveyed, increasing to 60% for those aged 40-44 – prompting Age UK to call for a review of this kind to be mainstreamed so it becomes a new social norm.

Successful government-sponsored pilots took place in 2013-15 and the Charity believes the career MOT should now be offered to everyone at age 50, so that people have time to make plans and put them into action in order to create the smoothest possible transition to retiring.

With the State Pension Age continuing to rise over the coming decades Age UK is warning that many people will have no choice but to work longer, thus making the case for a career MOT at age 50 since this would provide everyone with the chance to take stock and make adjustments if required.

The Charity’s new report explores why a career MOT at 50 for all is needed and looks at a variety of potential delivery models, including the National Careers Service, current employers and pension schemes among others.

The report also sets out a series of next steps and recommendations for the Government such as the following:

• Commit to creating an MOT at 50 for all, and extend the Mid-Life Career Review pilots to this end
• Link this initiative closely with the Government’s Fuller Working Lives (FWL) strategy.
• Ensure the Pensions Dashboard – an online service being developed by HM Treasury and the pensions industry – plays a useful role within the career MOT at age 50, helping people to gain a better understanding of their retirement finances and options.

Caroline Abrahams, Charity Director at Age UK, said: ‘Our research shows that millions of people across the country will need to continue working in some capacity past their State Pension Age. Some will want to and others won’t, but however people feel about it there is a lot to be said for taking stock at age 50, while there is still time to make changes to how the rest of your working life and your transition to retirement are shaping up.’