Brits fear retirement reform will lead to longer working lives

A global study into retirement has revealed that the majority of Brits anticipate further reforms to the public pension system over the next decade, and fear these reforms will mean they will have to work longer and retire on less state benefits.

The expectations of reform amongst UK workers (68 per cent) is broadly in line with the international average (66 per cent) with over half of those already retired (54 per cent) also predicting retirement reforms in the next decade. Amongst those UK workers who feel retirement reform is inevitable, a staggering 91 per cent believe it will mean an increase in the number of years they have to work. The UK has one of the strongest expectations of an increase in working years, along with France (89 per cent) and Japan (88 per cent).

In addition, seven in 10 (71 per cent) say that reform is likely to reduce public pension benefits. This is higher than the international average (57 per cent) but lower than Japan (94 per cent) and Germany (87 per cent). Workers in China (15 per cent) are least likely to anticipate a reduction in state pension benefits.AXA’s study also reveals that a third (29 per cent) of working Brits and a fifth (19 per cent) of retired Brits believe social security is in crisis.

Despite this, just over half of all workers (57 per cent) think they will have enough to live on in retirement, with almost two in three (64 per cent) retirees saying their current retirement income is sufficient – up from 57 per cent last year. Today’s retired population do realise how lucky they are and are sympathetic to the plight of the next generation – 83 per cent think they are having a better retirement than their parents did at this stage of life, but only 40 per cent think retirement will be better for their own children.

Steve Folkard, head of pensions and savings policy at AXA commented: “Some people have negative thoughts of retirement and it is not surprising that feelings of trepidation are heightened in the current financial climate. The research shows that a significant number of people are sure that retirement reform will lead to reduced public pension benefit and with this in mind, we would advise people to take steps as early as possible to secure their own retirement income. Although the majority of retirees say that their retirement income is sufficient, people still in work should be aware that having a happy and prosperous retirement costs money, so it’s vital they plan ahead.”