End of the 'golden age' of retirement?

The Momentum UK Team 09 January 2012

More pensioners will have to work well into their 70s due to the looming pension crisis, a think-tank has warned.

According to the report, by 2020 a new generation of 'wearies' - that's Working, Entrepreneurial and Active Retirees - will replace the golden age image of retirement as more will be unable to afford simply putting their feet up.

The study, titled 'Pensions: Crisis and Reforms', was carried out by Future Foundation and questioned almost 1,000 adults aged 18 and over about their attitudes to working in retirement.

According to research, many could become self-employed consultants, online traders or run odd-job businesses to make ends meet in retirement.

It revealed that 51% of those already retired would consider part-time work to supplement their pension. These figures jumped to 75% for those who about to retire.

59% also said they would run 'a small one-person business from home' or even do gardening (21%) for elderly neighbours.

A third of those questioned would also consider renting out a spare room to a lodger or move in with family members (14%) to save on living costs.

The report will fuel existing concerns about how the current economic climate will effect those in retirement.

The current increase in cost of living is most greatly felt by pensioners; the age group who spend the most on household bills such as food and fuel, both of which have risen significantly due to inflation.

Retirees have also seen the value of their pension pots eroded due to inflation and low interest rates.

For those still in work, the future pension crisis is being exacerbated because of the squeeze on public sector pensions and the closure of many lucrative final salary pension schemes offered by private sector companies.

Martin Palmer, head of marketing at Friends Life who commissioned the report, said: 'We're expecting the traditional image of the pensioner with slippers and rocking chair to change completely. Many will not have saved adequately for a secure retirement.

'Necessity is the mother of invention and "Wearies" will be among the most innovative and entrepreneurial contributors to the UK economy.'