Retirement used to be defined by an end to working life, but today it is more likely to mark the start of a more flexible working arrangement. Just 29 per centof UK workers believe that when they come to retire they will stop working altogether according to Aegon’s third Retirement Readiness Survey.
The survey which is based on interviews with 16,000 people in fifteen countries found that 36 per cent of people in the UK anticipate they will continue to work for a while part time or on temporary contracts while a further 14% hope to continue working in some capacity throughout retirement.
In contrast, Western European workers are more likely to view retirement as an end to working life. In the Netherlands for example 33 per cent of people expect to stop working when they retire, while the figures for Sweden (36 per cent), France (51 per cent) and Spain (52 per cent) were notably higher.
David Macmillan, Managing Director at Aegon UK said: “The Government’s decision to provide greater pensions flexibility sits well with the plans of many workers who see retirement not as the day they stop working, but the point at which they scale back their hours. Many of these people are likely to start drawing some income from their pension in order to supplement their part time earnings. The fact the Government is also allowing people to continue making pension contributions of up to £10,000 each year, whilst taking a pension means people can continue to top up their pension pot whilst drawing an income.”
People will have more choices about how they take their income, but the decisions they face about how best to do this will potentially be more complicated. For that reason it is worrying that just 12 per cent of people have a financial plan for retirement written down while 39 per cent of people don’t have any plan.
Many people are likely to continue working into retirement in some capacity but the words people most associate with retirement are still overwhelmingly positive. 48 per cent of people most associate the word ‘leisure’ with retirement, closely followed by ‘freedom’ (47 per cent) and then ‘enjoyment’ (34 per cent) and opportunity (23 per cent). This compares against the 15 per cent who most associate retirement with ‘insecurity’, ‘boredom’ (14 per cent) or ‘poverty’ (13 per cent).
David Macmillan continues: “We are living longer and many people can expect to spend twenty or thirty years in retirement. As a result it is not surprising that many people intend to work part time in retirement and balance flexible working against leisure and activities they’ve always wanted to do. However, increased flexibility means people have more choice about how they take their pension income and it will become increasingly important that people have a plan in mind.”
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