The nature of retirement has changed and it is no longer a matter of leaving the workplace with a golden carriage clock and entering a quiet life of leisure.
According to retirement specialist LV=, many people are taking a more gradual approach to retirement and are working beyond the state pension age, slowly cutting back their hours and reducing the number of days they work. Just one in three (38%) UK adults at state pension age no longer work – with working longer becoming the new norm.
UK adults who are in employment in their sixties are working an average of 24 hours, having cut down their hours over the years. Of those over 60s who are still working, a third (35%) want to phase their retirement, which could lead to them working part-time, or taking on consulting and voluntary roles to ease themselves into retirement.
There are many reasons for the rise in ‘part-time pensioners’. For some there is a financial element that impacts on their decision to work past state retirement age, with almost half (49%) remaining in the workplace to boost their retirement income. However, the key reasons people choose not to retire are because they enjoy working (52%) and feel that they are far too young to stop (46%). In fact, when asked how old they feel, three quarters (75%) of those aged 60+ felt much younger than they are, feeling aged 50, on average.
It would seem that over 60s refuse to be constrained by their age. The research revealed a particular group of modern day ‘grand-trepreneurs’ – adults of state pension age who are choosing to use their new-found freedom to set up or invest in businesses. Over a quarter (28%) of those who are working into later life run their own business, with one in five (21%) of these starting-up when the entrepreneur was in their sixties. At the same time, since semi-retiring close to a third (32%) have switched careers to try something new.
In fact, wanting to ‘have something to do (45%) and a desire ‘to feel useful’ (25%) are the key drivers behind the UK’s ‘grand-trepreneruial’ spirit, suggesting this is an ambitious group who believe they still have a lot to offer.
It would seem that when it comes to work, the over 60s are the real ‘boomerang generation’. The findings show that there is a trend to ‘unretire’, with many retirees returning back to work. One in six (15%) of those in their 60s have returned to work after retiring – equating to one million workers. Although some over 60s come out of retirement to give their retirement income a boost (49%), there are many who go back to work to avoid boredom (39%).
Interestingly while many are working longer, returning to work, or delaying taking their private pension to boost their retirement income, very few consider taking their state pension later. Just one in 20 (5%) of those working past retirement age have deferred their state pension, despite the fact that this would increase the value of their state pension by 10.4% a year.
Richard Rowney, Managing Director of Life & Pensions at LV= said: “For many people, working for longer is a positive choice. Many people in their sixties and seventies enjoy their jobs and are keen to remain active in later life. However we cannot ignore that for others, their financial situation means they have to continue working – or even go back to work after retiring – because they simply cannot afford to stop.
“With the nature of retirement changing it is important that people have the income flexibility they need in later life. We would encourage those approaching retirement to seek financial advice to ensure they are able to make the most of their savings and pension funds and select the best retirement income solution for them.”