A third of over-45s believe they may not have enough money to retire when they choose, a survey of employees has found.
Some 32% of mid-life employees feel this way, according to Aviva’s survey of more than 2,000 people in this age group.
The insurance giant is calling for more flexible state pension withdrawals.
It argued that people should be able to claim some of their state pension from state pension age if they want to and defer the rest so that the untouched amount rolls up.
At present, people do have the choice of being able to defer their whole state pension if they want to and claim it at a later date, which could increase the payments they receive when they do eventually want to claim it.
Aviva’s proposal would allow people to claim a slice of their state pension, which could top up money earned from part-time work as people heading towards retirement gradually cut down their hours. The unclaimed portion would increase in line with traditionally deferred state pensions.
The default retirement age was abolished in 2011, stopping employers from compulsorily retiring workers at 65.
Aviva said nearly half (49%) of UK employees aged 45-plus are already considering working for longer or are already working beyond the state pension age.
It said the median average age of the UK population has risen from around 34 to 41 over the past 40 years, a trend reflected in the UK workforce.
There are now more than 10 million people over the age of 50 in work – a record high.
Lindsey Rix, chief executive UK savings and retirement at Aviva, said: “There are several actions the Government and employers could consider to better support workers in the 45-plus age group.
“We believe the choice between claiming 0% or 100% of the state pension no longer reflects our increasingly flexible working lives and we are calling on the Government to allow individuals to make flexible withdrawals from their state pension when they reach their state pension age.”
Ros Altmann, a former pensions minister, has been calling for flexibility around the starting age for the state pension, to recognise differences in people’s circumstances.
She said that allowing some people to receive their state pension money sooner “would have tremendous social advantages”.
Baroness Altmann said: “The real problem with state pensions is that the starting age has risen too sharply and many people, especially women, desperately need to be able to receive payments before they reach the ever-rising age.
“Early access to state pension would be a much more valuable change than still forcing people to wait longer and then choose to have only part of the amount.”
She said that pension age flexibility would recognise the enormous differences in healthy life expectancy across the UK – which can vary by around 20 years depending on where you live or your type of career.
Baroness Altmann said: “There is no recognition of this in the state pension system. So even if you are terminally ill, have paid 50 years of national insurance and have no other pension, you can’t get a penny of your state pension before you reach pension age.
“Secondly, if people are caring for loved ones and are already in their early 60s, there would be social benefit in allowing early access to state pensions to reward family carers who have such difficult lives.
“Thirdly, perhaps people who have paid 45 or even 50 years of national insurance could be allowed their state pension sooner.
“Currently, you only need 35 years of national insurance for a full pension and can’t get any state pension until you reach the starting age, regardless of how many years of contributions you have paid beyond 35.
“This kind of flexibility would fulfil a social need, recognise individual differences and be a positive step forward for the current inflexible system.
“I believe this would be a far better reform than the complexity of people taking only a fraction of the pension and then the remainder increasing a bit over time.”