The number of older people continuing in work after 65 should be a “wake-up call” on the state of the UK’s retirement plans, according to Nest.

Latest official statistics show the number of workers over the age of 65 has exceeded one million.

Nest has pointed to a study from retirement firm MGM Advantage, which found 44 per cent of retirees who have taken a pension after age 55 but are still working part-time say they do so out of financial necessity.

“That so many older workers continue out of financial necessity should be a wake-up call about the state of the nation’s current retirement plans,” Nest director of communications and engagement Graham Vidler said.

“Too many people still have no choice about whether they can stop working or not when they reach retirement age.”

Workplace pension reforms mean millions more people will now save extra for their future, Vidler said, but he warned against complacency.

The government-established pension scheme’s research found 80 per cent of those who will qualify for auto-enrolment plan to work as long as they can, revealing a "big lack of confidence in what they have currently set aside”.

However, head of UK pensions at Towers Watson John Ball said that while it was easy to look at the number of over-65s in work as a sign of the beginning of a pensions crisis, there was more to the situation.

The number is partly a function of the baby-boom demographic reaching 65, and if there are more young pensioners around it is to be expected more pensioners will be in work.

“There are still more than twice as many 65 to 67 year-olds alive in the UK as there are pensioners of any age who are working. This suggests that later retirement has a long way to go yet,” Ball said.

Increases in the state pension age will also drive the trend of an older workforce, he added.

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