Eighth of Brits are delaying retirement by up to 10 years because of debt

New research from credit management firm Lowell, has shown that a high proportion of UK residents are delaying retirement because of debt.

According to the study, unpaid bills and loans meant that one in six Brits thought they would have to work five years longer than they planned. One in eight thought they would have to put off retirement for ten years for the same reason. 

The table below breaks down how long respondents expected to delay hanging up their work boots for the final time:

The time of retirement delay	%
1-2 years	9%
3 years	13%
4 years	12%
5 years	17%
6 years	6%
7 years	7%
8 years	2%
9 years	1%
10 years	12%

Growing financial worries is just one reason that Brits will be working for longer. This is because the age at which state pensions kick in has been rising for some time. 

Currently, it sits at 65, but this is expected to jump to 67 over the next few years for those born after April 1960. This will also not be the last time the pension age is adjusted, as the government re-evaluates it every five years. 

Many Brits were also shown to have concerns about surviving on their pension. 21% did not believe that they would have enough money to live on during retirement, with 8% worried that they would accrue more debt after they had stopped working.

The research also revealed that many common misconceptions about retirement and pensions exist within the UK population. 

For example, 13% incorrectly thought that you had to apply to be enrolled in workplace pensions, rather than it being an automatic process. A further 11% believed you could only retire at 65 when that is actually the age at which the state pension kicks in, at least until 2028.

With the cost of living crisis growing, knowledge and literacy of financial mechanisms like pensions are growing more important. This was underlined by John Pears, UK CEO of Lowell, in his comments on his company's research:

“Lowell’s research confirms that our customers do have concerns around managing their debt and retirement. But, it’s also highlighted that there are many common misconceptions and worries surrounding retirement across the general public; indicating that our customers are not alone and that retirement fund fears are an important issue for many.”

Sources