Two thirds (66 per cent) of people retiring in 2022 do not plan on giving up work completely, according to a new report launched today from Abrdn.
This compares to just over half (56 per cent) of those who retired in 2021 and a third (34 per cent) of 2020 retirees.
The research by Abrdn, which was carried out in November 2021, surveyed 2,000 UK adults who were either due to retire in the next 12 months or had retired in the past 12 months.
It revealed that a new ‘flexi-retirement’ trend is emerging as more retirees are deciding to work part-time or in the gig economy.
The report also identified how prepared retirees are for what is to come and how factors such as the rising cost of living and the pandemic are affecting their plans.
When it comes to their work plans, there is a significant trend towards ‘flexi-retirement’, the firm said.
A quarter (24 per cent) of the class of 2022 will go part time with either the same job or a new one, one in six (15 per cent) will continue to work for their own business, and just over one in 10 (12 per cent) plan to become entrepreneurs and start their own business.
The main reasons cited for ‘flexi-retirement’ include needing the income (31 per cent) and wanting to keep busy (32 per cent).
Colin Dyer, client director at Abrdn Financial Planning, said: “Gone are the days when everyone had a set date or a set age from which they’ll never work again. The emerging trend for ‘flexi-retirement’ for financial reasons, or just to keep busy, is here to stay. The class of 2022 are challenging the norms and doing what works for them.
“Hearing why retirees are choosing to work really underlines the importance of taking a holistic approach to retirement and how sensitive plans can be to external issues, such as the surge in the cost of living or the pandemic.”
Of those who plan to reduce their hours or get a part-time job in retirement, less than three in 10 (28 per cent) have taken financial advice about this decision.
Just a quarter (25 per cent) are aware of the potential tax implications around dipping into their pension while still working and still saving more into their pension.
Dyer added: “Working in retirement can have wider financial implications, all of which need to be planned for. This can seem complicated, but that’s where preparation and speaking to an expert can help.
“A financial adviser can help assess what people need to think about and what steps to take as a result – ultimately giving them the confidence to proceed with their plans to secure their future in a way that suits them.”
The research also looked at responses from individuals who retired in 2021 on how their first year of retirement had unfolded.
More than half (56 per cent) have continued to work and two fifths (41 per cent) of them have decided to seek financial advice on the matter.
A third (32 per cent) of those who are still working have joined or are planning to join the ‘gig economy’ – working for companies such as Deliveroo and Uber.
Abrdn’s report found that just a quarter (25 per cent) of this year’s retirees feel very confident they have saved enough to fund their retirement – compared to nearly a third (30 per cent) in 2021.
The firm said the rising cost of living is likely to be a key factor in this drop in confidence – with more than a quarter (27 per cent) saying they do not know how to mitigate the impact of rising inflation on their retirement income.
For one in five (20 per cent) their main source of income is their state pension, which is currently struggling to keep pace with inflation and four in five (82 per cent) have not sought any professional advice about their plans to retire this year.
One in 10 (9 per cent) also admitted they have not spoken to anyone about it – not even friends or family.
Dyer added: “Lots of people are not seeking any professional help with their retirement plans, and with the current pressures of the cost-of-living crisis, this could put them in an incredibly vulnerable position.
“More needs to be done to make seeking advice the norm and seeking it earlier to ensure retirees feel confident both financially and emotionally as they approach this new chapter in their lives.”
sonia.rach@ft.com
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