“Work till you drop” warning on pensions
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Some people may have to work till they are 81 to build up a decent pension pot, according to a report.
With the Government carrying out a review of the state pension age, research from Royal London says an average earner who starts saving for an occupational pension at 22, and makes the minimum statutory contributions, would need to work until 77 if they want the sort of “gold standard” pension enjoyed by their parents.
Royal London defines this “gold standard”, which includes the state pension, as two thirds of pre-retirement income.
For those living in high-income areas, such as Westminster and Wandsworth in London, achieving a pension pot of this size would take till 80 or 81, assuming contributions are not increased.
At the same time, a review for the Labour party has concluded that employees should double their contributions to workplace schemes, with a target of 15 per cent of earnings going into pension pots.
Traditionally, the state pension age was 65 for men and 60 for wome...
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