One in four not ready to retire

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One in four people planning to retire this year don’t feel ready to stop working, Prudential has found.

The Class of 2014 study tracked the aspirations of people who plan to retire and found a changing attitude towards retirement:

  • 13 per cent of people scheduled to retire in 2014 have postponed their plans
  • 54 per cent would consider working past the state pension age to make their retirement more financially comfortable
  • 23 per cent would consider working full-time and 31 per cent part-time.

Stan Russell, a retirement income expert at Prudential, said: “For many people retirement is now a gradual process rather than a watershed where you simply stop working one day and become retired the next, and that is reflected in the change in attitudes shown by our research.”

Deferring your state pension

Choosing to put off claiming your state pension allows you to do one of two things:

Increase your entitlement

Your state pension increases by one per cent for every five weeks you delay claiming. This equates to 10.4 per cent for every full year you don’t claim.

Extra state pension is taxable and could affect means-tested benefits. However, the flat rate single-tier system planned for 2016 onwards would replace the current means-tested top-ups.

Receive a lump sum

Deferring your state pension for at least 12 months in a row allows you to opt for lump sum payment.

Lump sums are taxed at the highest rate that applies to your other taxable income.

Your state pension is automatically deferred until you send your claim form to your pension centre. You can stop claiming your pension by contacting your pension centre.