The ‘pretirement’ predicament
The ‘pretirement’ predicament is something faced by a growing number of people.
In fact, research has found over half of unretired over 55s who plan to continue work don’t feel old enough to retire.
Over a third of over 55s plan to keep on working past what would have traditionally of been considered a ‘retirement’ age of 65.
The Scottish Widows think tank the Centre for the Modern Family also found a significant proportion of the over 55s plan to keep working in some capacity as they approach retirement.
A further 45% are unsure or are yet to make their plans for later life, which suggests fewer people are choosing linear career paths or traditional approaches to retirement.
Over 65s continuing to work has risen sharply since the abolition of a default retirement age in October 2011, by 26% to 1.1 million.
Despite the challenges faced by many ‘pretirees’, more older workers are using the legislation change to continue working for reasons of their own wellbeing.
The Centre for the Modern Family research found a significant gap between those who want to carry on working versus those who need to continue earning.
Over half of those who choose to stay in employment said that they don’t feel ‘old’ enough to retire.
24% want to keep working because they enjoy their job and want to continue their professional development.
The study highlighted that one in five men and one in 10 women felt improvements in family relationships as a result of spending more time independently.
The changing shape of the family unit has also impacted the possibility of retirement for many over 55s, with ageing relatives and boomerang children adding financial pressure at both ends of the spectrum.
Almost a fifth admitted that they will continue to work in order to support their family financially.
17% felt their ability to do their job is impacted because they are tired and stressed from balancing work and family life.
Almost half of over 55s who plan to continue working also said they will need to do so in order to supplement their pension, and a further 13% still have debt or a mortgage to pay off.
More than half of over 55s admitted that they are already struggling to make ends meet and have had to adjust their spending habits before considering life on a pension.
Almost a quarter say they have spent their savings or contribute less to savings now as a result of living costs in the last year, while a third have cut down on leisure spending.
It’s possible that family members are struggling to keep up with the attitudes of workers themselves.
This could suggest that older workers are juggling competing priorities as they try to balance the demands of their finances, family life, health and jobs.
The research found that 23% of people worry about the health implications of working longer for their ‘older’ relatives.
Family members also worry that for older relatives, choosing to work for longer could have a negative impact on their family, with 18% saying they feel older and younger generations will have less time to spend together as a result.
Almost one in 10 said it would make managing their own work and family life balance more difficult, a figure which rises to 13% among parents with children under 18.
However, positive signs are emerging that families can spot the benefits of a longer working life, both on health and family relationships.
More than a quarter feel that older relatives will be able to remain active for longer, whilst 23% feel they become good role models for younger generations.
Almost one in 10 also feel it will relieve the burden of financially supporting older relatives later in life.
We have no doubt that attitudes to work in later life and retirement will continue to evolve.
Some people choose to work past their traditional retirement age. Others are forced into making this decision by financial necessity.
Retirement plans must adapt to keep up with this retirement evolution.
Do speak to us if you have any questions about your own retirement planning, whether that involves early retirement or working for as long as you can.