The traditional idea of retirement is changing. No longer do the majority give up work as soon as State Pension age hits, but for the fifth year in a row, more than half of people planning to retire this year (51%) will consider working past that age, with the shift to 'pretirement' being the new retirement reality for many.
That's according to new research from Prudential, with the survey finding that 9% of respondents hope to continue working full-time in their current job, while 28% would prefer to cut their hours with their current employer, and 29% would look for a new employer altogether. A further 20% would hope to either start a new business or earn money from a hobby, so for many, the entrepreneurial spirit is alive and well.
But just why will so many continue working? Well, one in three (33%) say they enjoy working and 26% don't like the idea of retiring and being at home all the time, while 34% don't feel ready to retire and 30% would like to save more into their retirement fund.
However, financial considerations undoubtedly come into it, particularly given that respondents expect their retirement to last for 20 years. Unfortunately, 8% say they can't afford to retire, and more than half of those admit they haven't saved enough into their pensions; as a result, those respondents feel that they're unlikely to be able to give up work completely until they're nearly 70, in contrast to their preferred retirement age of 64.
"Our research has shown that a period of 'pretirement', where people choose to delay their retirement plans, change jobs, earn a living from a hobby, or go part-time, instead of giving up work altogether, has become the new norm for retirees in recent times," said Stan Russell, a retirement income expert at Prudential.
"However, not everyone is lucky enough to be able to make the choice – many will find themselves having to work on for financial reasons, while others may be forced to give up work for health reasons. Saving as much as possible as early as possible in their working life is the best way for many people to ensure they have control over their financial futures, and are well-prepared for a comfortable retirement that can begin when they want it to."
Make sure you're prepared for retirement – start saving as much as you can, ideally into your workplace pension, together with another savings vehicle (such as a cash or stocks & shares ISA) to ensure you're fully covered.
If you're getting closer to State Pension age, it's time to start considering your options, whether you're planning on giving up work completely or want to phase it out. Speak to our no obligation annuity planning service to discuss the prospect of securing a guaranteed income throughout your retirement.