- Number of employees aged 50 to 64 increase by 185,000, more than in any other age group
- Critical age band for retirement planning
- Over 55s need to beware of falling into MPAA trap
Steven Cameron, Pensions Director at Aegon, comments:
“After a worrying trend of over 50s leaving the workforce during the pandemic, it’s encouraging to see the number of employees in the 50 to 64 age group has increased by 185,000, more than in any other age group. Those in their 50s and beyond have a wealth of experience to contribute and losing that from the workforce is a missed opportunity not just for the individuals but also for employers and for the UK economy on its roadmap to recovery.
“For many individuals, their 50s and early 60s are a key life stage for boosting retirement savings, with many having to make up shortfalls if they are to have the lifestyle in retirement they aspire to. While currently individuals can start drawing their pension from as early as age 55, the longer people can keep working and keep up pension saving, the more comfortable an income they’re likely to have in later life.
“It’s also important to be aware that anyone who accesses their defined contribution flexibly from age 55 will fall into the little known Money Purchase Annual Allowance trap which severely reduces the amount they and their employer can pay into their pension in future, from £40,000 to £4,000 a year. This may be the case for some of the over 55s returning to the workplace and can be a barrier for getting retirement plans back on track.”
