More than two in five or 44 per cent of 55-64 year-olds plan to move into ‘semi-retirement’ before they reach 65, allowing them to draw on their pension savings while continuing to work part-time, according to Aviva.
The study, based on the fourth edition of Aviva’s Age of Ambiguity study, investigates changing attitudes towards employment and retirement as a result of the Covid-19 outbreak. Aviva’s findings highlight people’s shifting emotional and financial well-being as they deal with post-pandemic job insecurity.
More than nine in ten or 91 per cent people said they were “much happier” after reducing their working hours, implying that semi- or partial retirement – ‘part-tirement’ – could be the solution for more than half or 55 per cent of workers who like the idea of continuing to work through retirement, giving them freedom in later life while remaining part of the workforce.
Retirement can account for up to a third of an individual’s life as life expectancy continues to rise and more individuals than ever are surviving to 100 and beyond. Recent changes in government policy, such as the proposed increase in the state pension age to 67 in 2028, have caused people of all ages to reconsider their plans for work and retirement.
Over three-quarters of 18-34-year-olds, or 59 per cent, say they intend to semi-retire before the age of 65, rising to 61 per cent of those aged 35-44. The findings show that longer working lives are prompting younger people to consider a flexible strategy to working later in life in order to keep their career.
According to recent ONS data, 48,000 over-50s have lately returned to the workforce, as Chancellor Jeremy Hunt encourages people who have retired or are considering retirement to pursue part-time or full-time work to help alleviate some of the UK’s labour shortage challenges.
But Aviva’s study indicates that people prefer to work past the age of retirement, implying that the UK’s workplace participation problems would not be solved just by encouraging people to return to work.
Four in five, or 80 per cent of those over the age of 65, said they enjoyed the notion of working into retirement, with at least two in five, or 41 per cent of other age groups, agreeing.
Continuing to work can help improve mental and physical health, which informs overall wellbeing, as shown by Aviva’s ‘Wellbeing Circle’. It can also keep loneliness and isolation at bay.
According to Aviva, the urge to retire early is frequently motivated by persons seeking more independence while being physically strong and healthy enough to enjoy it.
Aviva says that semi-retirement can be a win-win situation for both employers and employees, as companies gain from preserving the skills and knowledge of skilled workers in the workforce, while workers can make decisions about maintaining a healthy lifestyle and income in retirement.
Aviva managing director for wealth and advice Michele Golunska says: “In a climate where longer working lives are becoming the norm, semi-retirement is a chance to experience the ‘best of both’ which can benefit both employees and employers.
“Retaining connection to their workplace is an appealing option for many people who are still working towards their financial goals or are simply not ready to stop working. It also provides an opportunity for employers to continue to harness the knowledge and expertise of more experienced staff for longer.
“We know retirement can look very different for everyone so we want to encourage conversations about retirement long before it happens, Aviva’s Mid-Life MOT app provides a number of tools to help people between 45 and 60 think about themselves more.
“As people live longer, investing time in ourselves and considering every option available in later life is the best way to ensure we have the retirement we aspire to. Starting to think and plan further ahead is a small step that can make a big, positive difference in the long term.”
