Workers in the UK are less likely than those across Europe to want to retire earlier than planned – but almost a third on this side of the channel have no back-up plan in case they are unable to do so due to ill-health, research shows.
The findings, from the largest global retirement survey of its kind carried out in 15 countries by international pensions and investment firm Aegon, also suggest that as a result, workers in Britain could be exposed to lifestyle-changing financial risk in later life as a result of the COVID-19 pandemic.
Just 30% of workers in the UK want to stop working as soon as they reach retirement age.
That compares to 57% of workers in Spain, 49% in France and 40% in Germany.
However, half of retirees already end up retiring sooner than they planned to and challenges brought on by COVID-19 could mean that figure “increases significantly”.
A spokesman for Aegon said that “thousands” of workers in Britain could find themselves in a perilous condition.
The spokesman said that “worryingly, there is a real prospect” of their flexible retirement plans being “upended” by the current pandemic.
While retirees of tomorrow expect to live well into their 80s, retirement is now “far more likely to be viewed as a transition rather than a fixed date, the survey found.
More than a half (58%) of those polled by Aegon said they see an “alternative route” to stopping work immediately.
By far the biggest reason for taking this route, according to 59% of respondents, is “the desire to keep active and their brain alert”.
However, the spokesman said the impact of the pandemic on the jobs market shows people need to make allowances for unforeseen circumstances and have a back-up plan in place.
He said: “Leaving paid employment earlier than anticipated raises funding issues and can force individuals to consider drawing upon savings earmarked for their retirement.
‘A gradual transition could turn into a sudden departure from work as the impact of coronavirus proves to be an employment game-changer‘
Steven Cameron, Pensions Director, Aegon
“With an increased likelihood that depleting savings early might mean running out of money during retirement, or even before planned retirement age, it’s important people have back-up plans.”
Around half (47%) of UK retirees say they retired sooner than they had planned and – consistent with the global results – the two largest reasons for stopping working were job loss and ill health.
Steven Cameron, Pensions Director at Aegon, added: “People’s plans and their choice of how and when they retire is susceptible to a number of factors, including their own health, the need to care for others and, unfortunately, ageism in the workplace.”
Currently, just one in three workers in the UK (36%) feel they work in an “age-neutral” workplace, recognising employees of all ages.
Cameron said: “Unfortunately, it may be for many, what they’d hoped would be a gradual transition could turn into a sudden departure from work as the impact of coronavirus proves to be an employment game-changer.
“Anyone whose retirement plans have been disrupted by an unexpected loss of employment in later life should consider seeking financial advice to explore their options.”