A quarter of Brits forced to delay retirement

In the current economic situation, according to new research from Life Trust, people are watching the value of their pensions shrink and other investments fall, making the prospect of retirement daunting and also dashing dreams they may have had for early retirement.

As many as one in ten (12%) adults currently working stated that, in the light of the current economic crisis, they now expect to have to delay their retirement by as much as five years. A further 8% expect to delay by between two and four years and 3% expect to put off leaving the workforce by a year.

For those at an age where they might be planning to retire early the findings are more alarming. Of those aged 45 to 54, nearly a third expected to be forced to delay retirement with just under a fifth (19%) planning to extend their working lives by five years of more. For the over 55s a staggering 41% said they would be delaying retirement with 15% expecting this to be for five years or more.

Early retirement now appears to be a dream that is out of sight for many given that it is the 55s and over who would have been most likely to have had this immediate expectation. With Life Trust's "Cost of Retirement" report 2008 estimating that it can cost £373,300 to finance the ‘early retirement years'2, leaving the workforce before reaching the official retirement age appears to be an increasingly unaffordable luxury.

For those who do still intend to retire early Life Trust warns that it is not just the economic climate, but also the issue of increasing longevity, that means there is a need for more financial planning than ever before. Current predictions of life expectancy are 85 for a man and 88 for a woman3, but the averages do not tell the full story. For example, someone who is 55 today has a one in four chance of reaching 95 and a one in 10 chance of making it to 100. Similarly, someone who is 35 today has an almost one in three chance of reaching 954.

Andy Briscoe, CEO of Life Trust says: "Retiring early is a privilege that was, until very recently, an ambition for many people. However, with worsening economic conditions coupled with increasing life spans this is now something fewer people are able to afford. This is all the more reason for people to understand the true cost of retirement and look at all the options that are available to them for financing their later years."

The Cost of Retirement report 2008, conducted by cebr for Life Trust, found that early retirees finishing work at the age of 50 will need £25,000 per year, to fund their retirement. The spending for an early retiree peaks at 60 (at nearly £29,000 a year) as people take advantage of their first few years away from work. Many Britons save throughout their lives in order to spend in their retirement, and people who are aged 60 are more generous with their money, spending £5,000 a year on recreational activities, such as cinema tickets, theatre and home entertainment.

To find out your chances of reaching an advanced age visit longevitycalculator.co.uk

For more information about Life Trust and the company's inaugural product, the Longevity Income Plan, which pays out more the longer you live, visit lifetrust.com