Retirement delayed to boost pension

More than 1.5 million people over the age of 55 claim they cannot afford to retire at the state retirement age because they do not have enough in the way of pension savings, new findings suggest.

A study by Scottish Widows has found that around 1.5 million people will continue working beyond the standard retirement age because they do not have enough money saved to stop working, however, around 4.5 million of over 55s said they would continue working beyond retirement age.

Ian Naismith, the head of pensions market development at Scottish Widows, suggested that the current generation of people approaching retirement was made up of haves and have-nots.

"The 'haves' generally have good employer pensions, often based on their final salary, and can retire at or before state pension age with good incomes. The 'have nots' are discovering that they will have to work for longer than they might have expected just to make ends meet," he said.

He suggested that as employer pension provision declines, future generations should consider saving for retirement now in order to prevent having to work until a late age.

The firm recently found that tax-payers in the UK could boost their savings by around £5.5 billion by taking advantage of the tax relief provided by a personal pension.