Impact of working longer and saving more in later life, commissioned by Friends Life

Document type
Adams, John; Duffield, Mel; Luheshi, Sarah
Pensions Policy Institute
Date of publication
17 March 2015
Poverty Alleviation Welfare Benefits and Financial Inclusion, Employment, Older Adults
Social welfare
Material type

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Friends Life commissioned the PPI to undertake research into the potential impact on retirement income and assets of remaining in paid work for longer. Impacts are considered both at the point of, and during, retirement. The baseline scenario involves individuals stopping work and starting to withdraw assets at State Pension Age (SPA). The analysis considers how state and private pension outcomes might vary if individuals adopt one of four different scenarios:

  1. Continue to work full-time and save for 1, 3, or 5 years longer
  2. Continue to work part-time and save for 1, 3, or 5 years longer
  3. Work part-time ahead of SPA
  4. Save an extra 1%, 3%, 5% each year between now and SPA

The modelling is undertaken using the PPI’s Dynamic Model. The Dynamic Model is a dynamic micro-simulation model. This means that an initial population of individuals are projected forward from the base year, with each individual being modelled independently by increasing their age, uprating their earnings and modelling the growth in their pension savings as they progress toward retirement.

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