Nearly a quarter of UK businesses predict that their staff will be working beyond the national retirement age within the next decade, as they cannot afford to retire earlier.

Around 1.8m people will be working beyond the state retirement age in ten years’ time, up from 750,000 today, according to a survey of over 500 finance directors by Prudential, the UK insurer.

The trend will be more marked at larger companies where nearly two-fifths of finance directors said they were expecting their staff to request to work past retirement age.

Companies are expected to see an increase in costs as a result, as an older workforce makes it more likely they will have to spend more on benefits, such as death-in-service payouts and medical insurance bills.

In the past year, seven per cent of finance directors have reported an increase in the number of employees requesting to work past retirement age, the study found.

Sharp falls in the value of people’s pensions has led to many workers delaying retirement or working part-time during the economic downturn.

“Workers face the stark choice of either having to save more for their pension from an earlier age or having to work longer if they are to avoid taking a significant drop in their standard of living in retirement,” said Martyn Bogira, Prudential’s director of defined contribution solutions.

Workers in the north are expected to be harder hit. Employers in the north, north-west and Yorkshire and Humberside expect over 16 per cent of their staff to be working beyond retirement age by 2019, while in London and the south-east the figure was just 2.4 per cent.

Prudential said this was likely to reflect differing average salaries in the regions, as those with higher average earnings can afford to retire earlier.