14% OF THOSE AGED OVER 55 HAVE FOUND THEMSELVES RE-ENTERING THE WORKFORCE

In recent times, a significant portion of retirees, specifically 14% of those aged over 55, have found themselves re-entering the workforce, driven by the inadequacy of their pensions to meet rising living costs, according to new research[1].

This phenomenon, further compounded by an additional 4% contemplating a return to employment, highlights a growing trend among older generations striving to sustain their standard of living in retirement. Notably, this trend is more prevalent among men, with 16% returning to work compared to 12% of women.

FINANCIAL PRESSURES AND LIFESTYLE ASPIRATIONS

A closer examination reveals that financial constraints are the primary motivator for this shift, with nearly two-thirds (64%) of those who have ‘unretired’ citing income issues as the key factor. An alarming 32% reported that their living expenses had escalated beyond expectations, necessitating a return to employment.

Additionally, 24% acknowledged that their pension was insufficient for a comfortable livelihood. Interestingly, a sizeable group (31%) expressed a desire to enhance their retirement income to afford luxuries, illustrating a blend of necessity and aspiration driving the unretirement wave.

ADJUSTMENTS IN RETIREMENT PLANNING

This trend coincides with the Pensions and Lifetime Savings Association’s (PLSA) recent adjustment to the anticipated retirement income, marking a 34% increase in the projected annual income required for a moderate lifestyle.

This adjustment, from £23,300 to £31,300, reflects rising costs in essential areas such as food, energy and transportation, alongside an additional allocation for assisting family members facing financial hardship. Such recalibrations underscore retirees’ evolving challenges, prompting many to reevaluate their retirement and financial strategies.

BEYOND FINANCIAL MOTIVATIONS

However, financial necessity is not the sole driver behind the decision to return to work post-retirement. A considerable number of retirees are motivated by the desire to alleviate feelings of boredom (39%), loneliness (19%) and dissatisfaction (15%).

These emotional factors and the financial pressures exerted by the current economic climate are compelling retirees to reconsider their retirement plans. In response, more than one in ten (12%) are postponing retirement, while 3% are taking on additional employment to bolster their income.

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Source data:

[1] Boxclever conducted research for Standard Life among 6,350 UK adults. Fieldwork was conducted 26 July–9 August 2023. Data was weighted post-fieldwork to ensure the data remained nationally representative on key demographics.

THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

A PENSION IS A LONG TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE). THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF BENEFITS AVAILABLE. YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.