45% of adults expect to work beyond their State Pension to make up for shortfalls

Ahead of the 4.1% rise to the State Pension from 6th April, research by Phoenix Insights revealed that nearly half (45%) of adults expect to work beyond their State Pension age to make up for shortfalls.

The findings highlighted widespread financial vulnerability, with a third (35%) of those aged 60 to 65 – just below state pension age – having no private pension savings at all.

While around one in five adults (18%) believed they could live on the State Pension alone in retirement, this confidence may be tested if proposed changes go ahead.

If the State Pension age is increased to 68 between 2041 and 2043, as recommended by the Baroness Neville-Rolfe report, Phoenix Insights warned that three million people could face a delay in receiving payments.

Patrick Thomson, head of research analysis and policy at Phoenix Insights, said: “April’s 4.1% state pension uprating will provide some relief to pensioners while cost pressures remain high.

“Since 2012, the triple lock has increased the state pension each year by the highest of inflation, wage growth or a 2.5% minimum, and April’s 4.1% uplift is the fourth highest since it was first applied.

“However, the state pension remains at a critical juncture with questions remaining over its long-term affordability and the future of the triple lock.”

Thomson said: “Projections suggests there will be five million more state pensioners in the UK by 2070 compared to just one million more people of working-age.

“Accelerating the state pension age could mitigate some of the cost challenge, but recent life expectancy projections are less optimistic making policy change potentially more difficult.

“Bringing forward the State Pension age increase to age 68 to the early 2040s would impact nearly three million people and not everyone will be able to work to a later state pension age.

“We are expecting another state pension age review in this parliament, which should offer more clarity on the timetable of the future increase to age 68.”

He concluded: “Even with the impact of the triple lock, the State Pension in the UK is lower than the OECD average, and the UK spends a lower proportion of Government spending on state support for pensioners compared to peers in the OECD.

“It’s important that any future change to the State Pension is combined with policy interventions to support greater retirement adequacy, including enabling people to remain in work later in life and boosting pension saving through auto-enrolment.”