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 ‘Pretirement’ the new reality for many retirees

20 July 2017

Prudential says the shift to ‘pretirement’ – where people gradually scale back on work or change jobs altogether rather than stopping work entirely – has become the new retirement reality, according to its latest annual research* into the finances and aspirations of those planning to retire in the year ahead.

Notably, this is the fifth year in a row in which more than half of those participating in the research who are due to retire said they considering working past their State Pension age or are already doing so (see table below).

Prudential said the research showed that many of the people who are planning to retire this year are now considering working past their State Pension age “in the hope of guaranteeing themselves a greater retirement income”.

Of those, 9% would continue full-time in their current job, while 28% would prefer to cut their hours with their current employer. A further 29% would look for a new employer altogether.

Meanwhile, one in five said they would hope to either start a new business or earn some money from a hobby.

And it’s not just about money, the research revealed. People planning to give up work this year expect their retirement to last for an average of just over 20 years, and with that in mind around a quarter (26%) of those who would consider working past their State Pension age say they do not like the idea of retiring and being at home all the time for such a long period.

Meanwhile, more than a third (34%) of those considering working beyond the State Pension age say they do not feel ready to retire, while 30% would like to continue saving more into their retirement fund.

However, financial worries are an issue for a number of those who are not retiring in 2017, with around one in 12 saying they can’t afford to retire. Of those who can’t afford to retire, more than half admit that they haven’t saved enough into their pensions.

The research also showed that those who are delaying retirement this year because they can’t afford it, feel that realistically they are unlikely to be able to give up work completely until they are nearly 70 years old. This is in contrast to 64 years of age, which is the average age at which they would ideally have preferred to retire.

* Research conducted by Research Plus via an independent online survey for Prudential among 10,605 non-retired UK adults aged 45+, including 1,000 planning to retire in 2017.

 

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