The proportion of older workers planning to work beyond the state pension age has increased dramatically in the last two years, according to a survey by the Chartered Institute of Personnel and Development (CIPD).

The Employee Outlook survey of 2,000 working people reveals that the recession has shrunk pension pots, savings, investments and house values.

The proportion of people aged 55 and above planning to work beyond the state pension age has jumped to 71%, compared to 40% in a CIPD survey two years ago.

The survey revealed that financial factors are the main reason employees of all ages plan to work longer, with 71% of those aged 55 and over saying this is the case.

The research also shows that the older people get, the more likely they are to be planning to work beyond state retirement age, suggesting that reality bites as they get closer to drawing their pension. Just 30% of people aged between 18 to 24 plan to work beyond the state retirement age, however 52% of this age group said they did not know and 18% said no.

"Employers need to review how they are helping their employees save for retirement to get value from their pension spend from 2012 onwards. With more people planning to work past 65, employers will have to accommodate older workers and motivate those who wish they could be elsewhere," said Charles Cotton, reward adviser at the CIPD.