Lack of pension planning forces retirees back to work

17 July 2008 / by Rachael Stiles
Often as a result of bad financial planning and pension investment, 64 per cent of Britons are considering returning to work after they have retired in order to make ends meet.

New research from life insurance provider Zurich has found that with 74 per cent of people never seeking retirement or investment advice, many are left with no other choice than to keep working after retirement age when they find that their pension does not stretch far enough.

A third of respondents to Zurich's survey said that they would be returning to work because of financial reasons, not because they enjoyed having a job.

The fact that there are so many more 'returners' today is a reflection of the changing nature of retirement in the UK, the insurer said.

"The combined impact of the rising cost of living, rising inflation, fears of recession and the constant media coverage of the credit crisis, has created insecurity for a huge number of people approaching retirement concerned about their financial future." said The Right Honourable Michael Portillo, speaking on the subject of' returnment', at Zurich's recent credit crunch conference.

"Given that so many people are aware that they will face financial difficulties in retirement, more and more people are staying on at work, or returning to work to help ease the financial pressures they face ahead." he said.

Other reasons given by retirees for expecting to return to work after they have retired include 26 per cent being worried about boredom, 22 per cent believe they still have a contribution to make to society through employment, and 10 per cent said they would miss the atmosphere of the workplace.

Just 36 per cent of people said that they would not consider going back to work at all.

Zurich found that the younger generation are the least likely to seek financial advice, with 94 per cent of those aged 25-34 choosing to forego advice about their financial future.

Consequently, the research also revealed that Britons have potentially unrealistic expectations about the kind of lifestyle that will be available to them in retirement if they do not plan ahead.

Almost half recognise that they are not preparing sufficiently for retirement, but still expect to be comfortable and enjoy their golden years, with 65 per cent expecting to go on holiday every year, and 16 per cent planning to travel extensively, with a holiday every three months.

Tony Solomon, business development director at Zurich UK Life, commented: "Whilst it is encouraging to see that people intend to lead such an active retirement, there is real need to alert people to the importance of planning for their retirement from an early age. If we fail to address this issue, there is a real danger that for those already enjoying their retirement, may be last generation to experience the financial freedom of a carefree retirement spent living off the children's inheritance."

© Fair Investment Company Ltd