11th August 2014
Retirement times certainly are ‘a changing as less than a third of UK workers expect that when they hit pensionable age they will actually stop working altogether.
According to Aegon’s third Retirement Readiness Survey while retirement used to be defined by an end to working life, these days it is more likely to mark the start of a more flexible working arrangement.
The survey which is based on interviews with 16,000 people in fifteen countries found that 36% of people in the UK anticipate they will continue to work for a while part time or on temporary contracts while a further 14% hope to continue working in some capacity throughout retirement.
In contrast, the insurer’s study found that western European workers are more likely to view retirement as an end to working life. In the Netherlands for example 33% of people expect to stop working when they retire. The figure for Sweden rises to 36% while France and Spain are notably higher, at 51% and 52% respectively.
David Macmillan, managing director at Aegon UK said: “The Government’s decision to provide greater pensions flexibility sits well with the plans of many workers who see retirement not as the day they stop working, but the point at which they scale back their hours. Many of these people are likely to start drawing some income from their pension in order to supplement their part time earnings. The fact the Government is also allowing people to continue making pension contributions of up to £10,000 each year, whilst taking a pension means people can continue to top up their pension pot whilst drawing an income.”
People will have more choices about how they take their income, but the decisions they face about how best to do this will potentially be more complicated. For that reason it is worrying that just 12 per cent of people have a financial plan for retirement written down while 39 per cent of people don’t have any plan added Macmillan.
While many people are likely to continue working into retirement in some capacity, the words people most associate with retirement are still overwhelmingly positive found the analysis. For example, 48% of people most associate the word ‘leisure’ with retirement, closely followed by ‘freedom’, at 47% and then ‘enjoyment’ at 34%. However 15% most associate retirement with ‘insecurity’, 14% with ‘boredom’ and even ‘poverty’ at 13%.
Macmillan added: “We are living longer and many people can expect to spend twenty or thirty years in retirement. As a result it is not surprising that many people intend to work part time in retirement and balance flexible working against leisure and activities they’ve always wanted to do. However, increased flexibility means people have more choice about how they take their pension income and it will become increasingly important that people have a plan in mind.”