Scale back on work or slow plans down
THE onwards march of ‘pretirement’ – where people scale back on work or slow their retirement plans down rather than giving up entirely – is continuing, with half of those retiring this year considering working past State Pension age.
This is the sixth consecutive year in which half of people retiring would be happy to keep working if it meant guaranteeing a higher retirement income.
More than a quarter of those planning to delay their retirement would like to reduce their hours and go part-time with their current employer, while one in seven would like to continue fulltime in their current role.
An entrepreneurial fifth would try to earn a living from a hobby or start their own business.
Around one in 12 of those scheduled to retire in 2018 have postponed their plans because they cannot afford to retire. Nearly half of those who cannot afford to retire put this down to the cost of day-to-day living, which means their retirement income won’t be sufficient.
The decision to put off retirement isn’t always a financial one. Over half who are already or are considering working past their State Pension age say it is to keep their mind and body active and healthy. Over two fifths admit they simply enjoy working, while just over a quarter don’t like the idea of being at home all the time.
The shift to ‘pretirement’ in recent years shows that many people reaching State Pension age aren’t ready to stop working. Reducing hours, earning money from a hobby or changing jobs are all ways to wind down from working life gradually and, for many, are important to avoid boredom and maintain an active mind and body.
However, not everyone has the option of extending their retirement date if they need to carry on working for financial reasons, and others may be forced to stop working for health reasons.
Saving as much as possible as early possible in their career is the best way for people to ensure they are financially well prepared for a retirement that starts when they wish (or need) it to.
Because people are increasingly treating retirement as a gradual process, regular discussions about their personal situation can help ensure that their retirement finances are sufficient to allow them as many options as possible.
Everybody wants to retire as comfortably aspossible. But retirement needn’t be an all-or nothing decision – it’s not a case of either you’re still working full-time or you’re completely retired. You’ve a lot more choice now than previous generations enjoyed.
Information based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change. Tax treatment is based on circumstances and may be subject to change in the future.
Although endeavours have been made to provide accurate and timely information, we cannot guarantee that information is accurate as of the date it is received or that it will continue.
No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation.