The number of people planning to continue working after they retire has grown to 66% this year, almost double the number in 2020 (34%), according to new research from investment company abrdn.
The reasons behind this surge in ‘flexi-retirement’ are decidedly split, with a third of people questioned saying they plan to carry on working to keep themselves busy while a third said that they will continue working because they need the income.
The survey of 2,000 people who aim to retire this year found that a growing number of people plan to continue working beyond retirement age to meet their needs for a more flexible approach to retirement.
Colin Dyer, client director at abrdn Financial Planning, said: “Gone are the days when everyone had a set date or a set age from which they’ll never work again. The emerging trend for ‘flexi-retirement’ for financial reasons, or just to keep busy, is here to stay. The Class of 2022 are challenging the norms and doing what works for them.”
However, while the trend of choosing to work longer or more flexibly is a positive step for those who want to continue working, it also highlights the growing number of people who are struggling financially as they approach retirement. Only a quarter of the people surveyed felt ‘very confident’ they have saved enough to fund their retirement (compared to nearly a third, at 30%, in 2021). With the soaring cost of living, many prospective retirees are likely to be wondering whether they can afford to stop working.
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Another key issue that the survey highlighted was how few people are getting professional financial advice on taking money from their pension pot while they are still working. The report found that of those who plan to reduce their hours or get a part-time job in retirement, only 28% have taken financial advice and only 25% are aware of the potential tax implications of taking an income from their pension while continuing to work and save into their pension. Find out more in our article Can I take my pension at age 55 and still work? and Should I use my pension to boost my income?
Dyer said: “Working in retirement can have wider financial implications, all of which need to be planned for. This can seem complicated, but that’s where preparation and speaking to an expert can help. A financial adviser can help assess what people need to think about and what steps to take as a result – ultimately giving them the confidence to proceed with their plans to secure their future in a way that suits them.”
If you are looking to speak to a qualified financial advisor, you can find one on VouchedFor or Unbiased.co.uk, or for more information, check out our guide on How to find the right financial advisor for you.