19th February 2016
More than half of planned retirees will consider working past their state pension age in a period of ‘pre-tirement’.
Research by Prudential shows ‘pre-tirement’, where people delay their retirement plans, change jobs or go part-time instead of giving up work, has become the new normal.
Over half, 51%, of those who plan to retire in 2016 are already working past their state pension age or are considering doing so. This is the fourth year in a row in which more than half of those due to retire are deciding to carry on working.
One in three people said they would consider working before retirement age but would change employer to do so, and 27% said they would stay in their current job with reduced hours. One in 10 planned to stay on full-time.
Of those whose planned retirement age was 2016, they expect to draw their pension for 20 years and give a range of reasons for putting off retirement. For many people, 29%, the decision is financial as they do not believe their pensions and other savings will provide a sufficient income to ensure a comfortable retirement.
Just under a quarter, 22%, will continue to work because they cannot afford to give it up.
There are also non-financial reasons for continuing work. Over half, 51%, said they would prefer to carry on working to keep their mind and body active. And 34% said they don’t feel ready to retire. Four in 10 said they enjoy working too much to give it up.
And 16% said they never want to retire.
Stan Russell, retirement expert at Prudential, said: ‘With this year’s retirees preparing to spend an average of 20 years retired it’s understandable why they now see giving up work as a gradual process rather than a one-off event.
‘However, for everyone who can choose their retirement date there are some who have no choice because they physically can’t continue at work, and others whose financial situation forces them to stay on. Anyone looking to give themselves the greatest degree of choice of when to give up work should be trying to save as much money as possible as early as possible during their careers.
‘Most people will have an idea of how they’d ideally like their retirement to pan out, and regular discussions with a professional financial adviser can help to make sure that retirement finances are sufficient to turn these ideas into reality.’