Two thirds of sixty-somethings are financially secure but the rest are struggling with money troubles, according to new research about people reaching retirement age.

If your income is £326 or less per week, you are often short of money, and are receiving benefits or renting your home later in life, you are likely to be living in precarious circumstances.

There are around 1.8million people in their 60s in England who are in this situation, and the number could pass the two million mark within the next decade, says the report.

Current government policy to encourage people to work for longer is having a negative impact on this group, argues the Centre for Ageing Better, which carried out the study.

For many people who are financially insecure in their 60s, expecting them to stay in work can be unrealistic given their health, caring responsibilities or other barriers to work, it says.

The charity explores which groups are more or less likely to face hardship in their 60s, and how to help future generations avoid the same problems.

Will you face money troubles in your 60s?

You are more likely to be financially insecure in your 60s in any of the following circumstances - you are a woman, single, from a racial minority, in fair or poor health, a renter, have lower education attainment, receive benefits, or are caring for a friend or family member.

The Centre for Aging Better also found that people who experience sudden shocks in their 50s or 60s that they are unable to recover from makes them more vulnerable to hardship.

Such events can range from business failure to ill health, relationship breakdown, moving back to the UK from overseas and costly home repairs.

If you are unable to overcome these challenges it can lead to increased debt, reliance on benefits and worsening living standards, says the charity.

By contrast, people who are financially secure in their 60s tend to have pensions, savings, property and stable incomes.

Owning a home outright with no mortgage, expecting an inheritance or having a private pension makes you twice as likely to be in the better off group.

To come up with its findings, the Centre for Aging Better analysed data from the English Longitudinal Study of Ageing, which is funded by research groups and a consortium of government departments.

The charity says there were 6.4 million people aged 60-69 in England in 2023, and this is expected to rise to 7.2 million in 2033. 

It estimates 29 per cent are struggling to get by at the moment, while 71 per cent are relatively well off.

How to address hardship in run-up to retirement

The Centre for Aging Better says the Government should undertake a comprehensive review of how policy supports people in their 60s before making any further increases to the state pension age.

This is currently in the process of rising from 66 to 67, and the Government is considering the timing of the next hike to 68.

The Centre makes the following suggestions.

- People in their 60s can find the transition between working-age benefits and the state pension difficult, so the government should review both this and how entering or increasing work affects entitlements.

- Those unable to work before reaching state pension age often face sharp income drops and limited support, so financial protection could be strengthened for the 60s age group.

- The Government should explore earlier access to elements of pension income for those unable to work, and review the adequacy of working-age benefits for those approaching retirement.

Enhancing Universal Credit payments by 20 per cent for those aged 66 during the current period where the state pension age is rising to 67 would cost approximately £140million, compared with the £10billion annual savings created by the increase, says the charity.

Expecting everyone to work longer 'unrealistic'

'Our research challenges the perception that people in their 60s are generally financially secure and approaching retirement from a stable position,' says Henry Allingham, research and evaluation manager at the Centre for Ageing Better.

'Instead, a significant minority are living with insecurity and are highly vulnerable to changes in their circumstances.'

Allingham goes on: 'Increases to the state pension age, the introduction of auto-enrolment, greater pension freedoms, and the end of forced retirement have all encouraged people to work longer.

'But for many in a financially precarious situation, the expectation that they will work longer is unrealistic given their health, caring responsibilities or other barriers to work.'

He adds: 'Current policy frameworks are not adequately supporting those who cannot work longer or who lack the financial resources to absorb shocks.

'Without urgent and targeted policy action, the number of people facing precarity in later life is almost certain to grow and grow.'

What if your pension is falling short

If you are worried about whether you will have saved enough, investigate your existing pensions. Broadly speaking, you need to ask schemes the following questions.

- The current fund value.

- The current transfer value - because there might be a penalty to move.

- Whether the pension is in a final salary or defined contribution scheme. Defined contribution pensions take contributions from both employer and employee and invest them to provide a pot of money at retirement. 

Non-public sector employers have now mostly replaced more generous gold-plated defined benefit - career average or final salary - pensions, which provide a guaranteed income after retirement until you die. 

Defined contribution pensions are stingier and savers bear the investment risk, rather than employers. 

- If there are any guarantees - for instance, a guaranteed annuity rate - and if you would lose them if you moved the fund.

- The pension projection at retirement age. You can use a pension calculator to see if you will have enough - these are widely available online.

You should add the forecast figures to what you anticipate getting in state pension, which is currently £241.30 a week or nearly £12,550 a year if you qualify for the full new rate. Get a state pension forecast here.

Consider whether you can afford to pay more into your pension, especially if your employer matches higher contributions, or if you receive bonuses and pay rises.

If you are tempted to merge your old pensions, read our guide first to ensure you won't be penalised.

 If you have lost track of old pots, the Government's free pension tracing service is here. 

Take care if you do an online search for the Pension Tracing Service as many companies using similar names will pop up in the results.

These will also offer to look for your pension, but try to charge or flog you other services, and could be fraudulent.