14% of retirees aged over 55 have gone back into work, according to new research1 from Standard Life’s Retirement Voice report, as their living costs have increased and their pension is not sufficient to fund retirement. A further 4% are also considering returning to work.
Men are more likely to have unretired, with 16% saying they have done this while 5% are also considering it, compared to 12% of women who have gone back to work again and 4% for whom this is a consideration.
Almost two-thirds (64%) of over 55s who have unretired say that income issues have been the driving force behind this. A third (32%) have found their living costs have increased more than they’d expected, meaning they’ve needed to return to work, and 24% have realised their pension is not providing enough income to live on. Meanwhile, three in ten (31%) want to earn more money so they can treat themselves more in retirement.
This analysis comes as the Pensions and Lifetime Savings Association (PLSA) increase the amount the income they expect to provide a single person with a ‘moderate’ standard of living in retirement by 34%, from £23,300 in 2022/23 to 31,300 this year. The uplift reflects higher food, energy and motoring costs as well as an extra £1,000 a year added to help family members who are struggling with their own bills.
Other retirees have returned to work or are considering doing so due to feeling bored (39%), lonely (19%) or unhappy (15%).
Increased living costs resulting in retirement plan re-think
Standard Life’s research also highlights that many over 55s are currently re-thinking their retirement and financial plans due to ongoing cost of living pressures. More than one in ten (12%) are now delaying their plans to retire, while 3% are taking on an additional job to boost their income.
Gail Izat, Managing Director for Workplace at Standard Life, part of Phoenix Group, said: “People’s finances have been under huge pressure over the past few years, and almost everyone’s been impacted to some extent. Many have had to rethink major life decisions, including those around retirement – some have delayed their planned retirement dates, or have returned to work after having previously retired.
“Most forecasters predict inflation will continue to fall, which will help to ease some of the strain. However, the cost of retirement is set to remain high, with updated PLSA figures highting the impact of retirees helping younger family members who have been struggling to pay their bills due to the rising cost of living. It’s clear that a ‘moderate’ lifestyle is likely to be out of reach for many based on their current level of savings.
“Providers and employers have a big role to play in helping people to engage with their pension and build up a strong pension pot from as early an age as possible, giving them the best chance of securing the lifestyle they hope for in retirement. Ensuring communications are clear, targeted and relevant is a great first step. Focusing on financial education and showing how long-term saving fits into a wider financial as well as signposting people to guidance and advice can also make all the difference.”
Standard Life offers tips to maximise pensions savings:
• Make sure you’re taking advantage of all the benefits of your pension plan from your employer. If your employer offers a matching scheme, where if you pay additional contributions your employer will match them, consider paying in the maximum amount your employer will match to get the most out of it.
• Getting a bonus this year? Deciding to pay some or all of your bonus into your pension plan could save you paying some big tax and national insurance deductions. Meaning you could keep more of it in the long run, and it could be a great way to give your pension savings a boost.
• Even a small amount could make a big difference in the long term, especially if you’re starting young. If you’re able to, think about paying a little more into your pension when you get a pay rise, find yourself better-off for a different reason like a tax cut, or have a little extra in savings. If you choose to increase your contributions as soon as a pay rise or tax cut kicks in, you won’t notice a negative difference now – but could certainly notice a positive one in the future.
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