Aviva has called on the Government to take a more flexible approach to the State Pension – ensuring that more people will have enough to retire on while encouraging some people to remain in the workforce for longer.
They say that 4.5 million current mid-life employees may not have enough money to retire when they choose. The state pension provides the largest single source of income in retirement for the average pensioner, and so it is central to the plans of many, but it also acts as an artificial line in the sand for millions of workers.
People in their late 60s are increasingly looking to carry on working and earning an income, but this is not always enough to get by on. Flexible withdrawals of the state pension from the age of entitlement would remove the “all or nothing” choice faced by millions of workers.
Allowing people to take some – but not all – of their State Pension would encourage more to carry on working, while leaving part of their entitlement to carry on growing in value for when they do finish earning an income.
Aviva also says that many consumers do not, or cannot, access regulated financial advice which means they are acting alone, hoping for the best.
They conclude that: “Our report shows there is a huge demand for a fuller working life amongst those aged 45+. However, we believe the state pension age acts as an artificial ‘hard line’ in the working lives of many. If we fail to prepare for an ageing workforce, the consequences will be damaging for generations to come.
“Not only could we see an increase in poverty in retirement; but also, a greater strain on our working population and a UK restricted from investing in its future as it struggles to navigate its present.”
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