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28% of working over-50's plan to continue working for an extra six years on average
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Two thirds of those ‘working later' will do so because they can't afford to retire
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4.3 million Brits have retired and since gone back into work
6.1 million[1] (28%) of today's over-50s expect to work past the current state retirement age, according to retirement specialist LV='s Working Late Index. The report reveals that on average, those planning to work past state retirement age will work for an extra six years, which could see them retiring at age 71 for men and 66 for women based on today's retirement age. One in five over-50s (19%) said they expect to work for at least a decade past the current state retirement age.
Affordability is the key reason stated by 51% of over-50s who plan to work beyond the state retirement age, while a further 11% want to delay taking out their pension in the hope its value would increase over time. In last year's Working Late Index, more than four in ten (43%) of those planning to work beyond state retirement age said they would do so because they enjoyed the job they do. In 2011 this has fallen to 37%, showing a shift to continuing to work for financial need rather than enjoyment. This is a trend that is likely to continue as the state retirement age increases to age 65 years for women in 2018, and to 66 for men and women in 2020.
Ray Chinn, LV= Head of Pensions, said: "The trend of people retiring well into their 60s, or even their 70s, has been increasing slowly over the last few years. The rising cost of living, low interest rates on savings and the fact that as a nation we are living longer has had a significant impact on our retirement aspirations, and the amount of money we need to live a comfortable retirement. Our findings have shown that a significant number of over-50s expect to work many years past the state retirement age, and we're likely to see this increase further."
No rest for the wicked
LV='s Working Late Index has shown that one in five over-50s - equivalent to 4.3 million people - had retired but have since gone back into work. London (27%) and the North West (25%) have the highest levels of retirees returning to the workplace. Of those who have gone back into work:
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11% returned in a part-time capacity, 6% into voluntary (unpaid) work and 3% back full-time
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37% went back to work because they felt they were too young to retire
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32% missed being part of the working environment
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For 30% it was financially-related: 20% said it was a necessity as their personal and/or state pension wasn't enough to support them in their retirement, and one in ten (10%) needed to go back to work to help continue financially supporting their family
However, going back into employment after retirement has given some over-50s an opportunity to fulfil other ambitions. A fifth (19%) took a complete career change when going back to work, and 12% took the plunge and set up their own business. Many have chosen to go back to work in a role that requires fewer hours than before (27%), and 18% are doing a job that is less stressful that their previous job.
Need for advice
The Working Late Index shows that just over one in ten (14%) of over-50s not yet retired intend to take professional advice about their retirement, with a further 9% saying they had been planning to seek advice but are worried they can no longer afford to do so.
Ray Chinn continued: "In recent years we have seen many people cutting back on the amount they are saving towards retirement. As a result many will have no choice but to work later in life to maintain an adequate standard of living in old age. We urge those nearing retirement not to give up on saving at such a crucial time and to consider all the options available to them, from releasing the equity in their home, to looking at more flexible or different types of pensions and annuities. For instance, if people are delaying retirement they are more likely to qualify for an enhanced annuity when they eventually retire, which makes a significant difference to the income they will receive for the rest of their life. It's essential that people seek professional advice about their retirement."
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