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State pensioners ‘increasingly saving into private schemes’

The proportion of Britons beyond the state retirement age who are still contributing towards private pension schemes is increasing, according to research.

Figures from the Department for Work and Pensions (DWP) indicate that the percentage of men beyond the age of 65 who are still saving in private schemes more than tripled between 2005-06 and the following year.

Paul Macro, senior consultant at global consultancy Watson Wyatt, says: "Employees are continuing to pay money into pensions at ages more usually associated with drawing money out.

"Employers have responded to age discrimination rules by giving older workers more opportunity to benefit from company pension schemes."

He adds that it would appear many workers have jumped at the chance to take advantage of such new opportunities.

In all, the DWP found that 21 per cent of those beyond the retirement age were still adding to their private pensions in 2006-07.

The figures follow warnings from consultancy Redington Partners that defined benefit pension schemes could suffer if inflation remains above four per cent in the UK.

According to the organisation, FTSE100 firms could find their pension liabilities have increased by a combined total of £56 billion following a 0.7 percentage point increase in inflation in recent months.

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