A phased retirement is predicted to become the norm as just one in three of us expect to stop working in retirement, according to new research.
Rather than coming to the end of a career, most workers believe that retirement will be the start of a more flexible working arrangement, according to research by pension provider Aegon. Just 29% of British workers surveyed said that they were prepared to down tools completely in retirement.
The survey, based on interviews with over 16,000 workers in 15 countries, found that 36% of people in the UK anticipate they will continue to work after retirement age either part time or on a temporary contract, with a further 14% hoping to carry on working in some capacity throughout retirement.
In contrast to the UK, our Western European counterparts were more likely to view retirement as the conclusion to their working lives. In the Netherlands 33% expected to stop working at retirement. This rose for Sweden (36%), France (51%) and Spain (52%).
After the seismic changes to annuities and pension drawdown announced earlier this year, people have greater freedom over how they choose to take their pension savings. However, with greater freedom comes more complicated choices. The survey also highlighted that just 12% of people have a financial plan for retirement written down, and 39% didn’t have any plan at all.
While many are choosing to work long into retirement, the words associated with retiring were still overwhelmingly positive: 48% of those surveyed most associated the word “leisure” with retirement, followed by “freedom” (47%), “enjoyment” (34%) and “opportunity” (23%). When discussing retirement in negative terms, only 15% associated retirement with “insecurity”, “boredom” (14%) or “poverty” (13%).
David Macmillan, Managing Director at Aegon UK commented:
“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 [...]
“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.”