Will we - and should we - ever retire?

retirement waiting©iStock.com/MachineHeadz

THERE is no such thing as default retirement age for most people, with the Government keen to push the idea that most people can continue to work as long as they want to.

What most of us think of as retirement age is the age when we become entitled to the state pension, which at the moment is between 61 and 68, depending on age and gender.

At the time of writing, a 35-year-old will be eligible for their state pension in 2046 at the age of 68, a 45-year-old qualifies at age 67, and a 55-year-old will get their free bus pass when they reach 66.

But increasing life spans, improving health into old age - and having to help the younger generation cope with the high cost of living - is adding financial pressure to the idea of retiring retirement.

Growing old disgracefully

According to the International Longevity Centre UK (ILC), the number of people in the traditional working age bracket, 15-64, will rise by 29,000 a year from now until 2037.

But over the same period, the number of people aged 65 and over will increase by 278,000 every year.

That means far fewer people contributing to the national purse through taxation, and the possible slowing or shrinking of an already stretched economy - and massively increasing demand for social security from those who are no longer of working age.

And it's not just those who we'd expect to have recently finished working that we'll be supporting. The proportion of people aged 80 and over is expected to rise from just 4.3% of the population to 10%.

This brings up another issue - healthy old age.

Life expectancy for British men is now edging 80, but the age to which men are expected to live in good health is just 63.

That means most of us face at least a decade of having to deal with deteriorating health, and the financial implications.

But I'm entitled to stop by now, surely

For those determined to stop working, all the advice is to think ahead.

To help avoid money related stress and ill health in old age, it's well worth being as prepared as possible, and finding ways to boost income and making the money last.

When it comes to company pensions, final salary and defined benefit schemes are all but a hazy memory, with defined contribution schemes meaning employees have to put more in to get less out.

And again, with the average person working in far more jobs and companies throughout their lives, keeping track of numerous pension schemes may be difficult - but it can make all the difference.

The ILC quotes a figure of 14.5% of 50-64 year-olds living in relative poverty, and it's unlikely their situation will improve upon retirement.

In addition, many people aren't aware of the range of benefits available over and above the State Pensions, and Age UK says 53% of those who do know about them don't claim because they think they won't qualify.

ILC and Age UK say 1.6 million of the people entitled to Pension Credit don't claim it, losing out on an average of £1,700 a year - and a further 2.2 million pensioners don't claim help with their council tax.

Suppose I'll keep working then

Research from the Equality and Human Right Commission in 2010 suggested that some 60% of over-50s wanted to continue working beyond State Pension age, on a part-time basis.

But in an age where jobs are no longer for life, looking for new work beyond a certain age seems to be much harder, even though the Equalities Act made direct and indirect age discrimination illegal.

The Prince's Initiative for Mature Enterprise reckons that if people aged 50-64 and facing early retirement stayed in work, it could increase the UK's GDP by a potential £88 billion.

One of the most frequent criticisms of longer working lives is that older employees are crowding out younger workers and contributing to high youth unemployment.

But rather than edging out younger candidates, the ILC say the likely number of job vacancies over the next decade will make hiring and valuing older employees - including those past traditional retirement age - a necessity.

The one thing for certain is that most of us face a much longer working life - and it's increasingly up to us to make it as comfortable and enjoyable as we can.

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