State pension blow for millions as older Britons 'unable to retire when they want'

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The state pension age is in the process of rising to 67 years old, and 68, in the years ahead

New research from the Standard Life Centre for the Future of Retirement reveals that more than a third of people in their 60s who have yet to retire are being compelled to extend their working lives as a direct consequence of the rising state pension age.

The study found that 36 per cent of this age group say the state pension age increase is the reason they must continue working.

Financial strain is a significant driver behind the trend, with nearly two in five 60 to 65-year-olds, 38 per cent, saying they remain in employment specifically to meet everyday living costs.

These findings highlight that for a substantial proportion of older workers, staying in the workforce is not a matter of personal preference but of economic survival.

These pressures could intensify if the government proceeds with reported plans to bring forward the state pension age increase to 68.

Under the existing timetable, the rise to 68 is scheduled to take effect gradually between April 2044 and April 2046, applying to those born between April 1977 and April 1978.

However, reports have emerged that Treasury officials informed the Office for Budget Responsibility (OBR) that "current policy" is to accelerate this timeline by at least seven years, potentially moving the increase to 2037.

The UK faces a broader crisis of pension under-provision, with more than 15 million people currently failing to put enough aside for their later years.

Catherine Foot, director of the Standard Life Centre for the Future of Retirement, said: "Working later in life can offer real financial and social benefits, particularly when it reflects personal choice.

"Yet for many people, this isn't a lifestyle decision but a financial necessity. Millions across the UK are unable to retire when they want, underlining the challenge of retirement adequacy and the need for longer working lives just to bridge the gap."

The research also shows that 37 per cent of working 60 to 65-year-olds are postponing retirement until they become eligible for the state pension, which remains a crucial component of most people's retirement income.

Separate Standard Life findings paint an equally concerning picture among those who have already stopped working. One in six retirees have either returned to employment or are considering doing so, as the shortfall in their retirement finances becomes apparent.

The Pensions Commission's interim report has acknowledged the necessity of extended working lives but stressed that the system must evolve to accommodate more flexible employment patterns if such expectations are to be realistic and equitable.

Ms Foot called for "expanded, age-tailored careers support, alongside better flexible work arrangements and improved access to in-work health support" to make later-life employment more feasible.

Yet she cautioned that even with enhanced workplace provisions, many individuals will simply be unable to keep working. Those living with long-term health conditions and unpaid carers face a disproportionate financial burden from state pension age increases.

Ms Foot urged the government to develop a clear strategy for protecting the most vulnerable both before and during retirement, ensuring that further changes to the State Pension age do not erode their financial security.