Thousands 'in the dark' about when they'll retire as state pension age 'on its way up' to 70

There is a growing divide between workers and non-workers in their retirement prospects, with those currently employed expecting to retire at 66 on average, findings from Phoenix Insights highlight.

However, those out of work face a markedly different reality, anticipating retirement at 71 - five years later than their employed counterparts.

Adding to the uncertainty, recent data shows that 16 per cent of Britons have no idea when they will retire, including a significant portion of over-55s.

Almost a quarter (24 per cent) of people expect to retire between ages 61 and 65, while 19 per cent anticipate leaving work before 60.

This recent survey data from Hargreaves Lansdown shows the varied retirement expectations across age groups. Notably, younger people appear more confident about their retirement timing, with only nine per cent of 18-34 year-olds uncertain about when they'll retire.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: "The over 55s are more likely to be in the dark than those aged between 18 and 34 about their retirement prospects.

"This could be for a variety of reasons. Some could love what they do and have no plans to stop, others may have not yet really engaged."

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Currently, the state pension age is 66 years old, however, another increase up to 70 has been floated in recent years in a bid to bring down the cost on the public purse.

As it stands, the state pension age is sitting at 66 years old and is scheduled to increase to 67 between 2026 and 2028 for those born after April 1960.

The benefit age threshold is scheduled to jump again to 68 between 2044 and 2046 which will impact people born after April 1977.

Rachel Lacey from interactive investor noted that the state pension age would need to be brought forward to 70 by 2040 to prevent the retirement system from buckling under pressure.

The state pension age has been a key driver of later retirement patterns in the UK.

Changes saw women's qualifying age rise from 60 to 65 between 2010 and 2018, before increasing again to 66 for both men and women between 2018 and 2020.

Further rises to 67 are planned in the coming years, pushing retirement horizons even further. Nearly half (45 per cent) of non-retirees expect to work beyond their state pension age, according to Phoenix Insights polling.

The state pension traditionally acts as a retirement signal, particularly for those lacking private pension savings. However, this signal may be weakening as future retirees anticipate needing to work longer.

Morrissey emphasises the importance of regular pension check-ups throughout working life to ensure adequate retirement planning.

She said: "Having an idea of what you want from your retirement can give you an idea of how much it will cost."

She recommends using online pension calculators to track progress and model the impact of increased contributions.

Another crucial step is locating any forgotten pensions from previous employers through the government's Pension Tracing Service.

Consolidating multiple pensions can improve retirement decision-making, though Morrissey warns to check for exit fees or guaranteed benefits first.

"Planning for retirement can seem like a complex prospect but having an idea of what you want and when you might like it to happen can really help you take control," she concludes.