WHY THE CONCEPT OF A ‘HARD STOP’ RETIREMENT IS BECOMING LESS PREVALENT

New research reveals that more than a quarter (28%) of individuals aged 25 to 54 do not foresee a complete retirement in their future [1]. This suggests the concept of a ‘hard stop’ retirement is becoming less prevalent among those considered to be in their prime working years. This emerging trend reflects a significant shift in how modern workers approach their career trajectories and financial planning.

With evolving economic conditions, increasing life expectancy, and a growing desire for personal fulfilment, many individuals are rethinking when and how they will retire. Instead of aiming for a traditional endpoint to their professional lives, they are exploring flexible work arrangements, part-time opportunities, and phased retirement plans that allow them to gradually reduce their workload while maintaining an active role in their careers.

GEN X FACES UNIQUE CHALLENGES

Among Gen X, those aged between 45 and 54, one in three (31%) believe it is unlikely they will ever fully retire. This highlights the pressures the ‘sandwich generation’ faces in their 40s and 50s, who may be caring for both elderly parents and their own children while also needing to manage their own expenses.

This group falls between those who benefit from final salary pensions and younger generations who benefit from auto-enrolment. Similarly, more than a quarter (27%) of millennials do not think they will ever completely retire, with 28% of 25-to 34-year- olds and 26% of 35-to 44-year-olds sharing this sentiment.

MILLENNIALS AND RETIREMENT

Older millennials are likely to face similar pressures to those encountered by Gen X, with auto-enrolment being introduced while they were already in their 20s. A gender disparity also emerges among the survey respondents.

Just one in three women (33%) believe they are likely to completely retire, compared to almost half (47%) of men. A quarter (25%) of Britons also say they do not envisage retiring before the age of 70, and almost a third (30%) want to continue earning to maintain their existing lifestyle.

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Source data:

[1] Research was conducted by Censuswide between 25th – 27th March 2024 of 2000 general consumers, aged 16+, national representative sample. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles and are members of the British Polling Council.

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 ACCESS BLE UNT L AGE 55 (57 FROM APR L 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 PENSION BENEFITS AVAILABLE.

YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.