Research also shows 2.5 million pre-retirees will be forced to delays retirement due to money problems
The ONS have published data examining the reasons and motivations for those over 50 returning to work, showing money as being the main factor behind the decision.
The data showed that for all age groups, money was an important factor, especially for those aged 50-54 with 69% stating money as being their main motivation. Of those aged 55-59, 62% said money was their main reason, and those aged 60-65, 59% said money was their main reason. For those with a physical or mental health condition money (67%) was also found to be the main factor.
Other reasons for over 50s returning to work include 68% stating they did not feel they had the skills to get a job and 68% also stated they were doing it to pay off a loan or mortgage. Of those who were considering returning it was found they were less likely to be able to afford an unexpected but necessary expense (61%) or own their house outright (57%) than those not considering returning (77% and 78%).
It was also found that nearly a quarter (24%) of respondents reported they had retired from their previous job, although only 6% of those aged 50 to 54 years reported this. For this younger age group stress (21%) was the most common reason for early retirement.
This data is supported by research from Legal & General 2.5 million pre-retirees will have to delay their retirement as a result of the cost-of-living crisis. Among those planning to delay, 1.7 million expect to have to keep working indefinitely in either part-time (19%) or full-time (9%) roles. They also found that pre-retirees who plan to delay their retirement say they will need to push it back by almost three years on average, with nearly two thirds (64%) unable to afford the loss of income whilst costs are so high.
Lorna Shah, Managing Director of Retail Retirement at Legal & General Retail, said:
“Retirement can be tricky to navigate even without the backdrop of rising living costs, so it’s understandable that those approaching retirement aren’t sure what they want to do next. While many choose to retire later because they enjoy their work, there are millions of people who’re making this decision based on necessity, rather than personal choice.”
Andrew Tully, technical director at Canada Life, commented:
“As inflation soars at double digit rates and the cost-of-living crisis continues to bite, we are seeing a growing number give retirement a second thought. Not only are people now looking to work beyond their state pension age, but in some cases, we are seeing a retirement boomerang, with people either considering or returning to the workforce from retirement due to growing financial pressures.
Looking ahead, the older workforce is going to be critical to the recovery of the UK economy as it will help to alleviate severe labour shortages, however, it is also a warning sign that people’s finances are under significant strain. For anyone worried about how the extreme market volatility and cost-of-living crisis could impact their retirement savings, seeking the help of an adviser is a sensible step. Not only will they be able to discuss the options, but will help people plan the retirement they have worked long and hard for.”