The recession has forced more than a third of people over age 55 to defer their retirement plans and continue working, says MGM Advantage.

The retirement income specialist said its research, forming part of its second annual Retirement Nation Survey, shows that 35 per cent of over 55s who are still working are now facing up to the fact that they will need to work longer in order to replenish their shrunken pension pots following a turbulent time in the stock market.

Twenty-three per cent of the age group added that they believe they will have to work beyond the State retirement age of 65, while 32 per cent are not prepared at all for retirement.

"One of the most worrying consequences of the economic turmoil is the knock-on effect for those approaching retirement," explained Craig Fazzini-Jones, director at MGM Advantage. "Millions of people nearing the end of their working life have been forced to slog it out for a few more years to see if their pension pots will make any kind of recovery. For many it is not a choice, but a necessity."

However, pressure from the recession has not affected everyone's pension pots in this negative way. A survey by Aon Consulting shows that 18 per cent of British workers have in fact opted to increase the amount they contribute to their defined contribution (DC) pension over the last year.

The employee risk and benefits management firm said workers are almost four times as likely to have increased contributions than to have decreased them, and the Employee Omnibus Survey also suggested that pension saving is regarded as a necessity, in spite of the past year's financial climate.

When looking at the 18 per cent who have increased payments, only two per cent have chosen to contribute a further £10 or less per month, which Aon attributes in part to salary increases. Nine per cent have added more than £50 per month, and two per cent of those have increased their contributions by more than £200 per month.

The remaining respondents answered that they had not changed their level of contribution (42 per cent) over the last 12 months, or had decreased their payments (five per cent).

"These findings are encouraging news as they show that for a significant number of people, saving for a pension is sacrosanct despite the recession," said Helen Dowsey, principal at Aon Consulting. "With some employers less able to contribute as generously as in the past, many individuals have taken it upon themselves to make up the shortfall. Aon would encourage all employees to carefully consider the amount they pay into their pensions and review this on a regular basis."

Share Story: