Millions of Britons could see their workplace pension as their “only source of income” in retirement if a recommended proposal is implemented.
Experts are warning of the potential pitfalls of raising the state pension age to 71 by 2050 which was recently proposed in a report by The Longevity Centre.
Concerns over the long-term affordability of the triple lock and changing life expectancy figures has sparked discussion over what the future for pensioners in the UK will look like.
These anxieties have been reflected in a recent survey carried out by the Pensions Management Institute (PMI) which found that nearly half of Britons have changed their retirement plans due to the cost of living crisis.
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Experts are warning a recent proposal could leave pensioners with only one "source of income"
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This includes 24 per cent of people who are set to delay their retirement and 23 per cent who have reduced their pension contributions.
Tim Box, one of the institute’s council members, outlined why this would be risky for millions of workers going forward if the state pension is hiked to 71.
He explained: “Our research shows the concerns that many people have about how well they can prepare for retirement.
“With only 30 per cent of our respondents believing that the state pension will be more than half of their retirement income, the role of private pension provision to fill the gap is critically important.
“If the state pension age is to be raised to 71, as has recently been speculated about, then private pension savings are likely to be the only source of income between stopping work and the commencement of the state pension for a huge swathe of those born after 1970.”
Furthermore, one in twenty people polled said they had stopped their pension contributions entirely due to rising costs.
Households have been forced to contend with inflation-hiked prices and soaring energy bills in recent years which had led many to review their finances.
The cost of a “comfortable” retirement has soared to £59,000 a year, according to updated figures from the Pension and Lifetime Savings Association.
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The Longevity Centre has recommended raising the state pension age to 71
PAPMI’s survey also highlighted the issues future retirees are currently having with preparing for life post-work outside of a potential state pension age rise.
Some 66 per cent of people polled believe they did not have enough information to pick their pension provider or the ideal plan for them.
Mr Box added: “These additional statistics show that it is vital that the Government ensures that savers are given appropriate support and education to save for retirement in an era when it is likely that state pension benefits will only become available in an individual’s eighth decade.”
Currently, the state pension age is at 66, but will increase to 67 between May 2026 and March 2028. It is expected that from 2044 it will rise again to 68.
