Latest research from abrdn reveals that two-thirds of those planning to retire this year will work part-time to keep up with the rising cost of living.
The research, which surveyed 2,000 Brits showed that many would-be retirees are considering part-time work with two-thirds (66%) planning to remain in some form of employment in 2022 compared to 56% in 2021 and 34% in 2020.
“Flexi-retirement” will now see a quarter (24%) of respondents planning to work part-time, whereas one in six (15%) will continue to work for their own business, and just over one in ten (12%) plan to launch a new business.
Colin Dyer, client director at abrdn Financial Planning, commented:
“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.”
31% of survey respondents said they are considering a flexi-retirement lifestyle because they will rely on the income, and 32% said it would keep them busy. The research found that just a quarter (25%) of this year’s retirees feel very confident they have saved enough to fund their retirement – compared to nearly a third (30%) of 2021 respondents.
Abrdn cites the rising cost of living as the driving force behind retirees’ decisions to take up employment as 27% of respondents said they do not know how to mitigate the impact of rising inflation on their retirement income.
Only one-third have taken any financial advice however, and just a quarter are aware of the potential tax implications around dipping into pensions while still working.
“Working in retirement can have wider financial implications, all of which need to be planned for,” added Dyer.