Default Retirement Age 'phase out' a wake up call to savers

With the new coalition Government's plans to phase out the Default Retirement Age (DRA) Friends Provident is stressing the need for savers in the UK to start planning ahead or face working into their seventies.

Friends Provident argues the change to the default retirement age may very well make it easier for people in the UK to work longer but questions whether that is really the best outcome people can hope for. The provider also cautions that a proportion of the 'greying' population may not in fact be fit enough to work.

With the number of workers aged 55 plus expected to grow significantly in the next 10 years (from 5.14 million to 7.16million according to the Visions of Britain 2020 report) Friends Provident is warning that, although it is good news for those who wish to work longer, people should not use this demographic trend as an excuse to put off saving for retirement.

Friends Provident's research - Visions of Britain 2020, The Workforce- showed 48% of workers would like to work either full or part-time beyond the statutory retirement age but warns workers should think twice before relying on a longer working career to fund their retirement.

Martin Palmer, head of pensions marketing at Friends Provident, said: "The concern is that by abolishing the default retirement age, we could be opening up a whole new can of worms. People need to be aware of the reality of working longer. As a nation we should start seeing retirement as a process in our lives and not a one-off event.

"We need to provide the right savings options to help enable this and help employers foster a suitable savings culture to encourage people to start investing in their future. More flexible employee benefit platforms can empower employees to choose the savings products right for their life goals and by increasing engagement encourage a bigger percentage of the working population to start making provision for later on in life."