Pensions crisis? What pensions crisis?

People retiring in 2008 are giving up work early and majority are looking forward to a final salary pension scheme to fund them in retirement, according to a study from Prudential.

The Prudential Class of 2008 Retirement Report reveals that despite widespread concern about the UK’s pensions crisis people retiring next year have in many cases never had it so good.

However Prudential is warning that 2008 could be the beginning of the end for the golden age of retirement with younger generations facing a very different retirement future as experts warn 80 per cent of final salary schemes are now closed to new members.

The Prudential Class of 2008 Retirement Report, the first major study of people retiring in a specific year, shows the average age for men to give up work is 60 while women are retiring at an average 58 compared to statutory retirement ages of 65 and 60.

Around 11 per cent of men retiring next year will be more than 65-years-old while 33 per centof women will be more than 60.

The study reveals the final salary scheme is not dead yet - 52 per cent of people retiring next year have final salary schemes and can plan for retirement with the benefits which final salaries schemes bring; only 22 per cent are quitting work with defined contribution schemes.

The gulf between haves and have nots is growing as worryingly almost one in four don’t have any pension savings and will have to rely on the State pension.

Ali Crossley, Prudential Retirement Insurance Director, said: “People retiring next year are in general entitled to think ‘What pensions crisis?’. On average they are giving up work early and can look forward to final salary schemes having worked hard throughout their lives.

“That is good news which is not often a phrase associated with pensions. However every silver lining has a cloud and with pensions it is never hard to find another side. Those of us coming after the Class of 2008 will perhaps not be so lucky unless we take action to plan for retirement.

“We hope our Class of 2008 research will help clarify the issues around retirement planning and provides an insight into the reality of retirement in the UK. The Class of 2008 may be the last to look forward to retirement unless the industry provides innovative thinking and solutions.”

Just 22 per cent of those retiring next year are doing so because they have reached statutory retirement age. Another 25 per cent are lucky enough to retire early because they can afford to.

Poor health is however a factor for many of those retiring next year. Around 18 per cent say they are giving up work because they are not well enough to continue. And another seven per cent are giving up work because they have been made an offer by their employer.

The Prudential Class of 2008 Retirement Report questioned more than 4,000 people with 464 people out of that sample size retiring in 2008. Further insights from the report will be launched over the next three months.