Today's retirees 'must work six years longer than in 2006'

Savers today need to work an extra six years compared with five years ago in order to retire on a comfortable pension, research suggests.

A typical male pension saver wishing to retire on an income similar to what he might have achieved in 2006 must now work an extra six years, according to findings from Axa Wealth's latest Pension Index.

Men's 'pension affordability age' is now 71.1 years on average, it found, up from 65 five years ago.

"Due to significant market volatility in recent years, pension savers face a significant shortfall in retirement income or a much later retirement age," Axa Wealth head of pensions development Mike Morrison (pictured) says.

Pension 'affordability' has fallen by almost 40% since 2005, Axa says. The average male saver retiring today faces a pension of just over half what they could have obtained five years ago.

The findings paint a gloomy picture for women too, with the female 'pension affordability age' now standing at 71.3 years - an additional six years and four months compared with 2006.

Although the index shows pension affordability has improved in the last 18 months - with the projected retirement age hitting a high of 75.8 for men and 76.1 for women in March 2009 - Axa Wealth has warned savers not to become complacent in securing their financial futures.

Morrison says savers need to protect themselves against the threat of extended periods of market volatility.

"People insure their homes and other valuable assets, but not their financial future," he says.

"Flexibility at retirement is a great idea, but flexibility that can take advantage of an upturn in the market with a guarantee of capital or income might be even better!"

Meanwhile, consumer research carried out by Axa has highlighted a stark mismatch between savers' desired and potential retirement age.

Although the average age people would like to retire is 58, the age people expect to be able to afford to retire is 64.

"This analysis highlights the stark contrast between retirement dreams and reality," Axa's Michael Gregg says.

"We have designed the index as a simple tool to encourage savers to look at pension affordability and act accordingly."