One in five Brits fears they will have to ‘work until they drop’ because they cannot afford to retire when they want, a study revealed today.
Researchers found money worries mean millions of over-40s are expecting to carry on working until they physically can’t continue.
Others are concerned about simply paying their day-to-day bills without the regular income from employment coming in.
A further three in ten expect to continue working until at least a few years past the state retirement age.
Clive Bolton, Managing Director of Retirement Solutions at Aviva which commissioned the research, said: ”For many, their retirement is a time they are looking forward to, whether it’s to get away from the pressures of work or simply having more time on their hands.
”But worryingly, it seems there are a large number of people who are so concerned about what their financial situation is going to be like, they are beginning to consider the possibility that they will always be working.
”I’m sure there are a small number of people who simply don’t want to give up work, but most would rather spend their retirement doing what they want to do, rather than continue to work.
”And while some will be working to ensure they have enough money to have the kind of retirement they are hoping for, it seems there are some who will still be getting up every day to go to work simply to pay the bills.
”Your state pension is unlikely to cover everything you want to do during your retirement and cover unexpected expenditure, so it’s important to have some kind of financial plan in place to provide additional funds to give you some breathing space.
”The change to pensions and annuities announced in this year’s budget now mean you can spend your pension pot how you want, but given we’re all living longer too, it’s still important to make sure you have enough put by to cover your annual costs for the long term.”
The study of 2,000 over 40s found that while the average adult would like to retire around the age of 60, one in five believe they will be working right until the bitter end.
More than three quarters said they are worried about being able to afford all they have planned during their retirement.
Another 64 per cent are concerned about simply paying for day-to-day living costs.
But despite these fears, around three in ten over 40s have no plans in place to fund their retirement.
Even of those that have a financial plan, 64 per cent admit it’s probably not going to be enough to do everything they want to do.
And almost two thirds of those surveyed wish they had started to plan for their retirement much earlier.
Worryingly, more than half don’t really have any idea what sort of sum they need to save in order to be able to achieve the kind of retirement income they are hoping for.
Two thirds already have at least some idea of how they would like to spend their retirement years, with the average Brit planning to go on three holidays, one of which is abroad, run a car and fill their time with a host of new hobbies and activities.
But with bills and day-to-day living expenses to cover as well, that means the average pensioner needs to have almost £1,200 coming in each month to have the kind of retirement they are looking forward to.
That amounts to a total of £14,185 for every year of their retirement – or nearly £30,000 for a couple.
Clive Bolton from Aviva added: ”It’s quite conceivable that people [who retire at the state pension age] could live for 30 years in retirement, so it’s important that they have funds available to support them, especially if they want to have an active and full lifestyle.
”It’s good to see that over two thirds of those surveyed have plans in place to fund their retirement, albeit some are concerned that it’s probably not going to be enough, but others don’t have any idea of how much they need to save in order to have enough in retirement.
”Aviva’s new retirement planning tool can help people assess the estimated future value of their personal pension plans, and how much income they might provide them with in retirement.
”It can also give them an indication of how much more they can accumulate if they change the amount they save each month.”
Essentials (Bills and food) £6,447.48
One holiday abroad £949.71
Two UK holidays £634.16
Three mini /weekend breaks £532.08
Run one car £2,044.32
Hobbies and activities £2,113.56
Visiting family/treating grandchildren £1,156.20
Private healthcare/insurance £308.28
Top twenty hobbies and activities to do in retirement
2. Take up a new class
4. Research your family tree
5. Go to the gym
6. Book club
7. Go to antiques/vintage fairs
13. Learn a musical instrument
14. Dance classes
15. Art class
16. Go back to college
17. Join a sports club
18. Fix/build cars
20. Poker/bridge club