The retirement age in the UK is rising more sharply than in any other European country.

Workers currently in their 20s and 30s could be made to keep working well into their 70s as British residents face the sharpest rise in retirement ages across Europe.

In a 2021 government research briefing that looked into how UK pensions are compared to those in other countries, it was shown that out of 28 countries, the UK ranked 11th in the highest retirement age category for men and women (at 66-years-old).

The current state pension age (the age at which you can retire and access your state pension) is currently 66. However, in the next four to six years, it is expected to rise to 67 and to 68, between the years 2044 and 2046.

This is subject to change though as the government regularly reviews the state pension age as more economic and life expectancy data comes to light. This could be a good thing, however, as people are living longer, the chance of it continuing to rise is to be expected.

It is also worth bearing in mind that the number of retirees is also increasing in the next few years which puts more tax pressures on the state and other existing workforces as those that retire, typically stop contributing to National Insurance.

Mr Luca Rado, Director of ‘The Line In Care Company’ has warned:

“In a decade or so (retiring at an early age) might not even be a realistic option in the UK.”

Reduced Retirement

In the UK, roughly one-third of workers are now aged 50+, and some experts are suggesting that the concept of retirement is falling away.

Ms Becky O’Connor, Head of Pensions and Savings at Interactive Investor has said that not only are more people depending on the state pension for a retirement income due to the entitlement age rising but so are the number of people reaching retirement age that are still in work too. She also suggested:

“What most people have built up through workplace or personal pensions is not usually enough for them to retire on, on its own.”

And as a result, more people may need to work longer if the government increases the state pension age.

But that’s easier said than done!

Ms O’Connor continued to say that for many, this may become challenging as your health typically deteriorates as you get older and that it’s often more difficult to maintain working in both physically and mentally demanding jobs as you approach retirement age.

She also warned that the typical income from defined contribution workplace pensions combined with the average state pension is only just enough to meet the basic cost of living standards.

So, with retirement ages expected to rise and those reaching their 60s needing to work longer in order to support a basic standard of living, how can you increase your retirement savings?

Saving for Retirement

To counteract the impact of increasing retirement ages, experts suggest that your two main options are to work longer (which can be impossible for some), or to start saving now to increase the funds that you have in your later life.

“If you want to avoid this (having to work longer) and keep the retirement dream alive, put more money into your pension than the minimum amount when you’re young,” claimed Ms O’Connor.

She also alluded to how some people are turning a blind eye to the Government’s increasing emphasis on taking personal responsibility to accumulate a decent amount of retirement savings to live from.

If you’re concerned or want to learn more about increasing your savings for retirement, get in touch with our friendly team of advisors today!

Coffey Brooks are a team of Independent Financial and Mortgage Advisers based in Clacton-On-Sea, Essex and are directly authorised and regulated by the Financial Conduct Authority.