Lack of government clarity could cause retirement confusion

Friday, July 2nd 2010

Many older Britons could be left in limbo over how much cash they must save before retirement unless the government makes clear its intentions.

Age UK believes the Conservative-led coalition should set a timetable for the phasing out of the default retirement age.

Otherwise, millions of people at or approaching retirement age could be unsure of exactly when they will give up work and, as a result, how much they must add to their pension before they can do so.

"While scores of people intend to work past state pension age because they either need or want to, hundreds of thousands of them could see their retirement plans disrupted by the default retirement age," explains Michelle Mitchell, charity director at the organisation.

She also warns allowing employers to force workers to retire may lead to an unnecessary loss of skills and expertise across many sectors.

A 2005 study by Aviva found only 52 per cent of people believed they should work longer, despite life expectancy increasing.