The number of people aged 16-64 who now say they are retired has fallen to 1,110,000 in November-January 2023, according to new labour market data.
This is a 7 per cent decrease in the number of early retirees, or those aged 16 to 64 who declare they’ve retired, in the recent six months from 1,196,000 (May-Jul 2022), with almost 90,000 re-entering the workforce.
According to Just Group, it implies that the cost-of-living constraints driving ‘The Great Unretirement’ may linger beyond 2023, and that, combined with market volatility, which has impacted the value of many people’s pension assets, may encourage more older employees to give up the dream of early retirement.
Just Group group communications director at retirement specialist Stephen Lowe says: “The cost of living crisis and market volatility are likely to have contributed to driving a number of early retirees back into the workforce over the past year,” he said.
“Those who may have felt able to retire before claiming the State Pension will have seen their household budgets squeezed as everyday items soared in cost. At the same time, many will have seen turbulence in the financial markets hit the pension savings and investments they were relying on to bridge the gap between giving up work and receiving the State Pension.
“The hard realities of how tricky it is to make a defined contribution pension last securely for a full retirement will have been brought home to many, and as defined benefit pensions disappear from the private sector this challenge will only grow for the UK’s workforce. These defined contribution pensions will also be expected to last longer as longevity nudges upwards.
“Tomorrow’s Spring Statement may bring measures designed to attract workers back to the labour market, including a possible acceleration of the state pension Age. This change would see UK workers faced with the stark choice of either working longer or working out how to fill the financial gap until they get their State Pension.”