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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.”

Contact us to discuss your retirement planning.