        |
| The
first choice for people
in pensions |
| Living
longer, working longer?
By Sophie Baker |
| People
are officially retiring later, according to Watson Wyatt’s’
analysis of data from the Office for National Statistics (ONS), with
men leaving the labour market in quarter two of 2008 at an average
age of 64.6 and women at 61.9 years. In its Pensions Trends publication update, the ONS said these average ages are the highest level since data first became available in 1984. Data which was compiled by the Organisation for Economic Cooperation and Development (OECD) and the Pensions Commission suggests, according to Watson Wyatt, that the average retirement ages have seen a downward trend between the 1950s and mid-1990s, but after this these ages increased. “For a long time, it was a common belief that rising prosperity would allow each generation to retire earlier than their parents but reality has now bitten,” commented Paul Macro, a senior consultant at Watson Wyatt. “The longer people are expected to live in retirement, the more money they will need to see them through to the end of their life. For those lucky enough to be in a final salary pension scheme, that’s largely the employer’s problem. For everyone else, it means saving more or working longer.” Macro added that there is now a trend of people paying into their pensions at ages which are more usually associated with drawing money out. However, the financial consultancy said that this increase in retirement ages came primarily from a period when there was an increasing demand for labour, so Watson Wyatt is pessimistic as to how this will continue should the economy experience a period of contraction. “The number of people working past State Pension Age has continued to rise even after overall employment levels started coming down this year, but it’s still early days,” admitted Macro. “Stock market falls will intensify the need for some people to postpone their retirement, but they could find it harder to hold on to their jobs in a recession.” - Pensions Age October 2008 |