Recession hits pension funds as almost two million Britons delay retirement
Approaching two million people have delayed retirement after seeing a fall in their pension funds, according to survey results from retirement income firm MGM Advantage.
Over a third of those over 55 intend to keep working until the stock market recovers in order to maximise their retirement income.
Nearly 25% of over 55’s now anticipate they will work beyond the state pension age of 65, while 32% admitted they were not financially prepared for retirement.
The survey illustrates the difficult choice facing pensioners - work into old age or try to survive on a significantly reduced income.
Interest rates on savings accounts are currently at a record low which further exacerbates the problem. Low interest rates, together with the closure of an increasing number of final salary pension schemes, places pensioners under more economic pressure.
Craig Fazzini-Jones, Director & Head of Designs for Retirement at MGM Advantage said: ‘Millions of people nearing the end of their working life have been forced to slog it out for a few more years.’
Vicky Redwood, of Capital Economics, said: ‘It’s a bleak picture at the moment for those retiring and they are going to have to carry on working or accept that their incomes will not be as comfortable as they would hope.
‘If you’re relying on markets getting back to the level they were then it could take several years.
‘One of the problems is that people are relying on equity-release schemes to top up their incomes but house prices have been going down so that is not as worthwhile.
Unfortunately the next year is going to be a time to make some hard choices.’
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Important things to consider about equity release:
- Equity release could affect your current or future entitlement to means-tested benefits
- Releasing equity to spend in your lifetime can reduce the amount that is left in your estate when you pass away
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