Not everyone wants to stop working when they reach State Pension age. For many people, working provides happiness, purpose and many other lifestyle benefits in addition to financial gains. In our latest blog, George Square Financial Management looks at why more and more people in the UK are working beyond the retirement age.
The right to work beyond the age of 65 is protected by law, with the Equality Act 2010 making it illegal to discriminate on the basis of age in the workplace. Effectively, this means an employer cannot force its employees to retire and it cannot set up a compulsory retirement age without clear justification. But do people want to continue working beyond the retirement age?
According to a recent global survey by Aegon, 48% of UK workers state that they are planning to continue working beyond the retirement age.
Why are we working beyond retirement age?
The survey also looked at the reasons why people chose to continue working past 65. Perhaps surprisingly, most people aren’t staying in the workforce for purely financial reasons. The health benefits that work provides is actually the main driving force behind this decision, rather than a lack of funds.
Over half of those in the UK (55%) who wanted to prolong their career said that keeping active and keeping their brain alert was the most important benefit of continuing work.
The focus of maintaining good health and staying active through work tallies with people’s concerns about issues later in life. Survey participants cited declining physical health and the largest retirement concern(48%), followed by fear of Alzheimer’s or dementia (41%). They saw both elements of failing health as more of a concern than running out of money (40%).
Transition into retirement
Interestingly, the survey found that only 28% of workers in the UK want a ‘cliff edge’ retirement where they stop working in one go. This is the lowest across Europe, and one of the lowest among the 15 countries surveyed. Workers in Spain, for example, are far more in favour of stopping work altogether and entering retirement, with 52% favouring this option.
People are increasingly redefining their working years and time spent in retirement, choosing to blend work commitments with more free time as they transition into retirement.
While an increasing state pension age will explain why some see themselves having a longer working life, the research also shows an interesting association between health and remaining in paid employment. Today’s generation of workers recognise that one of the best ways to protect their health is to remain active and that work can be a part of an active life.
Maximise your retirement savings
Working beyond retirement age can give you a sense of purpose and, of course, a salary. But it still pays to plan for retirement, so you won’t have to work if you don’t want to – or if it becomes physically difficult to do so. Since most people stop working three to four years earlier than planned, it is beneficial to maximise your retirement savings now, especially during the early working years.
From pensions to ISAs, income protection to inheritance tax, our expert financial advisers at George Square Financial Management will take the time to explain the retirement savings options available to you and help you to identify the most appropriate to achieve your goals – whatever your age, circumstance and requirement – ensuring that when the time comes you have sufficient income to enjoy your retirement.
Contact us for advice
Whether you’re planning on working beyond retirement age, would like a phased retirement or plan on stopping work altogether, we can help you get there.