The thought of reaching retirement age is what keeps many workers going, but what if you didn't – or couldn't – give up work? Would you choose to keep working after state pension age? A growing number of people are doing just that.
For many people there's no clear cut-off date to stopping work, and much of this could be due to not having enough pension savings to fall back on, research from Aegon has suggested. The figures show that, despite workers planning to retire at 63 years-old, 64% aren't confident about making that target, and 61% will carry on working if they haven't saved enough by the time they reach it.
However, that's not to say that they want to continue working full time. While 36% plan to continue working in their current role until they have enough saved, 28% expect their employer to create a part-time or flexible role, and 9% expect to become self-employed.
The trend for working into retirement could become even more apparent in the future, with a whopping 93% admitting that they're falling behind on their retirement savings. As such, most would prefer to keep working rather than dip into their pension pot too soon, with fewer than one in 10 (8%) of those approaching age 55 planning to take a lump sum as they near retirement – something that the freedoms allow them to do if they wish.
"Workers across the UK are waking up to the reality that they will likely have to work well past their planned retirement age to make up for shortfalls in their savings," said Angela Seymour Jackson, managing director of Workplace Pensions at Aegon UK. "With so many expecting to work on past traditional retirement age on more flexible contracts, employers will need to move quickly to accommodate this new later-life work culture."
Despite some people having no option but to continue working, it seems that some people are actively choosing to take that path. Additional research from Prudential has found that 21% of pensioners surveyed have gone back to work since they reached the state pension age or are planning to do so in the future, with the most common motivation being a desire to stay mentally active (61%).
The need to boost retirement income is still a factor – 56% said that this was another motivation – but it's encouraging to see that a simple desire to stay in work is leading the way. Indeed, 16% will look to take on a voluntary role in retirement, so it really isn't all about the money.
Nonetheless, it's important to be prepared. As Stan Russell, retirement income expert at Prudential, says, "for people who are hoping to give up work completely when they retire, saving as much as possible as early as possible in their working life remains the best way to secure the most comfortable retirement".
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