Moneygate

Plans to scrap retirement age increase need for best investment returns, say Moneygate.

An ageing population and an increased willingness to work among older people has led the Government to look at the law which allows firms to force staff to finish work at 65.

Plans to scrap the retirement age have also been backed by the nation’s equality watchdog, the Equality and Human Rights Commission. But the move once again highlights the need for people wanting to retire early to secure the best pension plans coupled with top investment funds.

A survey of 1,500 workers by the commission suggests a rule change would be welcomed by many workers. It found that 64% of women and 24% of men wanted to remain economically active after the state pension age (currently 65 for men and rising to 65 for women by 2020).

This raises implications for pensions across the board and national IFA Moneygate believes older people should be taking advice now before the law is changed.

Annabel Green of Moneygate said: “As the population ages I think many people would welcome giving more flexibility to older people but it will have implications to people’s pensions and how they plan to retire in the long run.

“As with any financial product we would urge people to take full independent advice on the matter before making decisions which may affect their future. There are many structured investment solutions available to suit a variety of individual needs.”

Around 60% of the survey group said they wanted to continue working but on a part-time basis, while 40% said they would like to stay in their current jobs but with greater flexibility in the hours worked.  Plus many of the people surveyed believe they can be entrepreneurs after retirement.

The commission survey also revealed that almost two-thirds of those questioned said they were as strong physically and mentally at work as they were in their twenties and thirties, while almost half of older workers were content with their jobs.

Under the latest proposals, employees would not have to work past retirement age but instead would be given the choice to carry on working, into their 70s or even their 80s.

But, as in the case of parents with young children, the commission is proposing that older workers should also have right to ask to work on a flexible basis, such as working part-time or from home, or make a range of other variations to their hours.

Miss Green of Moneygate added: “The obvious benefit of working longer is that more cash is put in the pension pot.  I think for a lot of people it will give them the flexibility of part-time working to keep active while enjoying a better standard of living.

“No decision has been made at a Government level but there seems to be consensus that changes have to be made to accommodate an aging population.  The message for younger workers is to make sure they have adequate pension provision going forward.”

For more information and advice visit www.moneygate.co.uk