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Record number of people have no retirement plans

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One in seven (14%) non-retired people, the equivalent of more than 5 million people, do not plan on retiring, according to research by investment management firm Baring Asset Management (Barings).

 

This has increased from 12% in 2012 and 10% in 2011, and is the highest proportion since the annual study began in 2008.

A further 40% of respondents said they did not know when they would be able to retire, up from 38% in 2012 and 36% in 2011. 

For those that do have plans to retire, the average expected retirement age has increased to 64 years old, up from 62 in 2009. Among people aged 65 and over who are yet to retire, the average expected retirement age is 71.

Marino Valensise, chief investment officer at Barings, said: “It is clear that uncertainty is increasing for many people around retirement plans. The worry is that a lack of sufficient financial planning and pension provision combined with increased longevity is having a real impact on a large proportion of the population.”

Annuity Window launched

The research comes as the Association of British Insurers (ABI) launches an Annuity Window service, which aims to help people get the best deal from their retirement income.

The initiative is compulsory for all ABI members selling annuities to the public and will feature rates from 24 companies.

Now up and running, the service reveals a 31% difference between the best and worst conventional annuity rates, with Reliance Mutual coming out on top. 

Tom McPhail, head of pensions research at Hargreaves Lansdown, said the service is a welcome development.

“With the demise of guaranteed final salary pension schemes, millions of people now have to rely on their private savings to deliver a decent standard of living in retirement,” he said. “It is highly unlikely that their existing pension company will offer them the best deal, so shopping around is absolutely vital.”