One in eight young workers in UK ‘expect to retire by 55’
Younger workers think they will retire years earlier than their older counterparts, according to a new survey.
Around one in eight 18- to 34-year-olds expect to retire by the age of 55, while the average person in this age group thinks they will do so just before their 64th birthday.
In contrast, people aged 55 and older believe they will retire at nearly 68 years of age, according to the Opinium poll of 2,000 people carried out in September.
The age at which newly-retired people receive their state pension increased to 66 earlier this month, though this is set to be increased in the future.
Sarah Coles, a personal finance analyst at Hargreaves Lansdown, which commissioned the survey, said some savers may be ‘in for a nasty surprise’.
She said: ‘We see today’s retirees downing tools in their early 60s, picking up their largely defined benefit pensions, and settling in for a comfortable retirement – and we assume we can do this too – at roughly the same age.
‘Unfortunately this is far from true. The vast majority of people paying into pensions today will have far less generous defined contribution pensions, which means we’ll retire on smaller, non-guaranteed incomes.
‘If we retire too early, there’s a risk we could run low on funds as we go through retirement.
A decade ago, women qualified the state pension at 60, and men at 65, but these have been brought in line and gradually increased in recent years.
The creeping rise reflects increases in life expectancy, which has more than doubled to more than 81 years since the first state pension was introduced in 1908.
According to 2017 data, people who reach the state pension age tend to live for another 24 years.
Ms Coles added: ‘The horrible truth about our retirement tends to sink in as we get older. Those under the age of 35 have high hopes of early retirement, that gradually recede as harsh reality kicks in, and by the age of 55, on average we expect to retire at the age of almost 68.’
A range of free online calculators let people track whether they are putting enough aside to reach their desired retirement income.
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