Pension alert as Britons adopt ‘flexi-retirement’ – what working later could mean for you

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Pension approaches can vary from person to person, but having a fund set aside for retirement is likely to be key. While traditional pension approaches often see people retire at around state pension age, and begin to draw on any pension savings they have accumulated, it appears the stance is slowly changing. Now, research from Standard Life Aberdeen has shown more people are taking a flexible approach to their retirement goals.

More than half of those retiring in 2021 do not plan on giving up on work completely, with 27 percent planning to go part-time rather than leaving employment altogether.

One in five of those asked said they would dedicate time to volunteering, while just over one in 20 said they would start their own business.

The changing approach to retirement could be fuelled by a number of reasons, however, most significantly is the impacts of the COVID-19 pandemic.

Undoubtedly, the crisis has had both a financial and social effect on older Britons, changing priorities and shifting outcomes.

Some may be more strapped for cash and forced to work longer to cover their goals for retirement, while others may have lost their jobs, or become disillusioned with a traditional working environment.

John Tait, Retirement Advice Specialist at Standard Life Aberdeen, commented on the matter.

He said: “What it means to retire has been evolving for some time now.

“Long gone are the days of everyone having a set date or a set age from which they’ll never work again.

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“Instead, there is a noticeably growing trend towards flexi-retirement and continuing to work.

“Whether that be a financial decision, or an emotional one, how you choose to retire will entirely depend on what is right for you.”

The report also studied those who retired in the midst of the pandemic in 2020, again showing a shifting attitude towards retirement.

A third of 2020 retirees said they have continued working to some degree, with a further one in five considering a return to work part time after having stopped.

When a person retires, however, the financial implications of this decision must be considered. 

As highlighted, with the approach to retirement changing, many people will need to consider their options.

Fortunately, there are different sources of support available to help older Britons in this circumstance.

Pension Wise and the Money Advice Service are both provisions backed by the Government to help people gain free and impartial support.

Alternatively, some individuals may prefer to enlist the support of a financial adviser to tailor support to their specific needs. 

Mr Tait concluded: “The pandemic has clearly only further fuelled this flexi-retirement trend.

“Our research shows more of the Class of 2021 are planning to carry on working to some degree compared to 2020 retirees.

“Meanwhile, some of last year’s retirees are already contemplating returning to work.

“Retiring amidst a pandemic wouldn’t have been what last year’s retirees had planned for, and perhaps going back to work was made more appealing given the lockdown restrictions.

“However, with restrictions now gradually lifting, many will be gearing up to start enjoying the retirement they had planned for.

“Whether that be travelling the world, spending more time with family, or continuing to work part-time.”

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