Adults approaching retirement could add £46,388 to their savings if they defer their pension by 5 years.
According to research by Aegon, a 65-year-old could increase their monthly income by £314 – up from £457 to £771 – if they delay retirement and keep on contributing to their personal or workplace pension.
Those who delay by 3 years (aged 68) could add an extra £25,542 – increasing their post-retirement income by £164 a month.
Out of 2,000 people surveyed, those between 55 and 64 contributing to a pension scheme were paying £355 a month and had an average fund of £105,496.
Those 65 year olds with a fund of £105,496 and paying £355 into their pensions would see a 67% boost to their savings if they maintained those payments and remained in work for 5 more years.
That would equate to a total pension pot of £151,884 and a post-retirement income of £771 a month.
On changes to working patterns and transitioning from working life to retirement:
- 25% expect to continue working full-time, while a further quarter expect to work past state pension age on a part-time basis
- 12% would cease work upon reaching state pension age, while 9% will stop working pre-retirement.
Steven Cameron, pensions director at Aegon, said:
“Working a few years longer and saving into a pension can dramatically improve retirement incomes.
“This is a result of the triple boost of continued investment growth on the pension fund, further contributions being added and fewer years to spread the fund over once no longer working.”