Jayne Dowle: Keeping right on to end of retirement road

THE older I get, the more into denial I go. I try not to remind myself that my knees creak a bit, that I’ve got a bunion on my right foot, and that I really, really need to wear glasses for reading. But the one thing I can’t deny is that I will probably be working for ever. The news that Tesco is to force its staff to work until the age of 67 to get their full pension reminded me sharply of this fate.

I won’t bore you with the complicated mathematical reasoning behind Tesco’s decision – it is connected to the price index used to assess the value of a pensions pot – but the point is this.

Wherever we work, we should all prepare ourselves for very long service indeed. What is this outmoded concept of a “retirement age” anyway? It is more than a century since Lloyd George introduced the concept of universal “old age pensions”. We can’t complain at how things have changed since; we live longer, have healthier lives, and are far less likely to die a horrific death from an industrial disease before we reach our three score years and 10. The flip side of course, is that not only can we carry on for longer, we don’t have a choice.

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If Tesco, Britain’s biggest private company, can raise the retirement age at will, other organisations are sure to follow suit. Then, whatever your plans might have been, you will be beholden to the whim of your employer; trapped on the shopfloor filling up the frozen peas instead of sitting on a cruise ship sipping a pina colada.

Rely on a state pension? Until some politician comes up with a long-term solution that sounds workable, do-able and affordable for this century, I won’t be pinning any of my retirement dreams on it.

I suppose this is typical of my generation. We might rack up credit card debt, and borrow more than we can afford to pay back, but you can’t say that growing up under Conservative governments didn’t teach us to be self-sufficient. I was 24 when I first contemplated the idea of a pension. To think now that when the pensions’ advisor asked me at what age I might like to retire, I merrily ticked a box that said “55”.

Scarily, that’s not much more than 10 years ahead now, but the prospect of never lifting a finger again to earn money in a decade’s time is about as remote as a round trip to the Moon. In any case, that particular pension was so rubbish and so mis-sold, I ended up cashing it in and spending the meagre contents on a trip to San Francisco. It probably did me more good than watching it gradually erode away to nothing.

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I’ve got another plan in place now, and because I teach part-time at university, I’m in the teachers’ pension fund. But the last time I calculated it all up – the things I do for fun, huh? – I would have about six grand a year to live on if I was to retire at the age of 63.

Now, I don’t know about you, but it wasn’t my lifetime’s ambition to live on six grand a year, or £500 a month. I’m sure that by then the children will have flown and won’t cost me the annual debt of a small nation in shoe leather, food, goalie gloves and dancing lessons. And if all goes to plan, the mortgage will have been paid off, but still, I’ll have to eat. And have gas and electricity. Basic stuff like that.

And the problem is, unless I win the Lottery (I don’t actually do the Lottery, so this could be a problem), I can’t really see this situation changing very much at all. Like thousands upon thousands of other ordinary people, I simply do not have the hard cash at my disposal to invest anything like what is required into a retirement fund to create a decent income.

I’m told by those who know about this kind of thing that if I want to buy a pension annuity in double figures, I’m going to have to salt away something like a quarter of million pounds in the next 20 years or so. It could be more. Annuity rates are in freefall; put simply, when it comes to trading in pension savings for income, every year we’re getting less and less for our money, and not even the cheeriest financial advisor seems able to put a positive spin on this.

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So that’s why I am not in denial. Like the two-thirds of people who, according to a recent survey for Prudential, have decided to delay retirement because they can’t afford it, I’m prepared. I’ve accepted that my sixties won’t be when I finally get time to slow down and sniff the flowers, and maybe write that novel or go to India for a month. It looks like I might have to save all that for my eighties. Let’s hope my knees, my feet and my eyesight hold out.