Four in Ten Tradespeople to Rely on State Pension Amid Retirement Age Uncertainty

Four in ten tradespeople expect to rely on the state pension to help fund their retirement, according to new research released as uncertainty grows over how long millions of workers may have to wait before they can access it.

The research, which was commissioned by specialist insurance provider Tradesman Saver, comes amid reports that the planned rise in the state pension age to 68 could be brought forward from 2044 to between 2037 and 2039, potentially affecting around five million people currently aged between 49 and 55.

Reliance on the state pension increases considerably as tradespeople approach retirement. It forms part of the retirement plans of 47% of those aged 45 to 54 and 58% of those aged 55 and over. Fewer than a third (31%) of tradespeople currently has a private pension.

The data shows that nearly a third of tradespeople (29%) already expect to continue working beyond state pension age. This includes 18% who plan to work until the age of 70 and a further 11% who believe they will continue working beyond 70.

A quarter of tradespeople (24%) plan to work part-time in a trade to support themselves during retirement, rising to 35% of those aged 55 and over. A further 17% expects to work part-time outside the trade.

Beyond pensions and continued employment, tradespeople expect to rely on a range of assets and income sources to support their retirement. Around one in five (19%) plan to use investments such as stocks, shares or ISAs, 14% think will sell and downsize their home, 13% have property investments and 12% plan to use proceeds from a business. However, more than one in ten (11%) currently has no plans in place to support their retirement.

Only 39% of tradespeople feel confident about their retirement plans, with confidence even lower among those aged 45 to 54 at just 30%.

Dean Laming, Managing Director at Tradesman Saver, said: “The state pension remains a central part of retirement planning for a significant proportion of tradespeople, so any uncertainty around when they will be able to access it is understandably concerning.

“For someone working in a physically demanding trade, being asked to work for an additional year is not necessarily the same prospect as it is for someone in a less physical occupation. As people get older, it can become more difficult to carry out physical work and there is a greater risk that an injury or health issue could affect their ability to earn before they reach the age when they can access their pension. Any future decisions about the state pension age must recognise that people’s ability to remain in work varies significantly depending on their job.

“Tradespeople must also realise that financial planning needs to go beyond thinking about retirement savings alone, and they should consider how they would protect themselves, their income and their families if they were suddenly unable to work because of an accident, injury or illness.

“The outcomes of the state pension plans remain to be seen, but we hope tradespeople and builders can be given the clarity and sufficient notice they need to make realistic plans for both their working lives and retirement.”

Source : Tradesman Saver 

Image : XiXinXing / shutterstock / 378589792

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