Standard Life's reaction to today’s ONS figures on Older workers in the labour market

Thursday, 14 June 2012

Julie Russell, Standard Life’s Head of Customer Relationships, comments: 

“Todays’ ONS figures show that the number of people working beyond state pension age has reached 1.4 million. While some of these people may choose to continue to work as they enjoy it, the concern is that others are forced into working longer as they’ve not saved enough to retire at their normal retirement date – they have no option but to continue in either a full-time or part-time job. 

“The shape of retirement as we know it is certainly changing and there is a concern that more people will be working longer in the future, as they will not have saved enough. The state pension is also set to rise to age 67 by 2026, followed by increases every five years thereafter. So someone aged between 25 and 29 will not receive their state pension until the age of 73.

“All of this means that people need to save even harder to fund their future. But the good news is that whatever people invest in a private pension now, the government automatically gives basic rate tax relief on. So, based on current rules, if someone invests £100, the government tops this up to £125. And a higher rate tax payer can currently claim the higher rate tax rebate too. What's more, if someone is in a workplace pension, chances are every time they invest in it, their employer will contribute to it too.

“The data from the ONS confirms  people need to start saving for retirement as early as possible if they want to be able to stop work and enjoy their free time at an age that is right for them. We hope that auto-enrolment into pensions will help to ensure that more people are saving more for their retirement from a younger age. It’s clear that making the most of pension contributions now can help people enjoy their retirement in the future.”

The two increases already planned for 2019 and 2026, followed by increases every 5 years thereafter