If you are approaching retirement you will be (or should be) carefully considering your retirement finances. It is always going to be difficult to go from an “earning wage” to a retirement income, and inevitably in many instances, there will be some drop, even a marginal one, in your standard of living. For some however, the drop is too great which forces many to have to continue working past the conventional retirement ages.
In fact official figures have demonstrated that between August and October of 2009, an extra 75,000 of pensionable age were indeed working. This contrasted sharply with figures showing that the overall level of employment in the UK was falling because of the recession. Sadly, this is due to increased hardship as well as other factors such as the withdrawal of final salary pension schemes. Others may never of had a final salary scheme and simply do not have the finances saved to retire at 60 or 65. Another problem is that savings rates have fallen massively as the Bank of England cut interest rates to 0.5%.
Rates for annuities are also low at the moment and have been falling steadily for the past few years, which means that even those who buy annuities will be receiving less income than they would have just 12 months ago. Pension experts Hargreaves Lansdown say that a 65 year old male on a level-term annuity with a £100,000 pension fund could have received an income of £7,855 in July 2008 but would now only get £6,781.
The question of when to retire is one best made by the individual concerned. A fixed rate annuity could help you plan your future if you are unsure about what is ahead. This will mean that you can guarantee your annual income in the future and then plan around that. If you need more money, you could take up part time work for example.
Finally remember that the retirement ages of 60 and 65 for women and men, which incidentally are due to increase according to the times newspaper….“current government plans the pension age for men was due to go up to 66 in 2026, to 67 in 2036 and by a further year each decade. The women’s pension age was due to rise to 61 next year, 62 in 2012, 63 in 2014 and 64 in 2016.” are only based on convention. If you are fit, healthy, active and enjoy work, you should work for as long as you feel is necessary!
