In a report by Zopa and Consumer Intelligence, almost half of respondents (49%) agreed that ‘retirement is now a more fluid process than it was in the past’ and one in five (21%) don’t want to stop working as soon as they reach 65.
‘Pre-tirees’ are easing themselves gradually into retirement by reducing their working hours in favour of other interests. Setting up their own business (12%), changing career (9%) and travelling more frequently (45%) were other hallmarks of those in pre-tirement, although many also continued to work (both paid and unpaid) well beyond the state retirement age.
Significantly, just 24% of those aged 55-64 said they would be financially secure if they had to retire immediately, while only half of those aged over 65 were confident that they would be.
89% of 50-54 year-olds said they don't know for certain at what age they will retire, whilst 35% said they expect to retire later than they had originally planned.
More than half of 50-64 year-olds believe that changes to the state pension age are making the retirement process more confusing, and 28% said they will need to retire later as a result.
In the study of more than 2,000 50-80 year-olds, it found 17% of those aged over 65 said that they remain in paid employment, while a further 30% do unpaid work. Although those of retirement age earn significantly less on average, those working are more likely to command top wages; 3% earn over £75,000 per year, compared to 2% of 55-64 year-olds and just 1% of 50-54 year-olds.
Giles Andrews, CEO and co-founder of Zopa, comments:
“Retirement in Britain is no longer an event that involves clearing your desk at 65. Having a more fluid retirement process is a result of many of us being fitter and healthier later into our lives, not wanting to simply down tools at age 65 or being unable to afford to stop working completely. On the other hand, many are choosing to improve their work: life balance by cutting their working hours earlier in life. The pre-tirement trend is a seismic shift in the way Britons think about retirement. It will require many of us to review our own financial situations much earlier in regard to how we will support ourselves when we choose to stop working full time.”
Increased flexibility in the way people approach their retirement will also require more flexible financial products in line with people’s more flexible working arrangements. With pension changes due to come into effect from April 2015, rigid pension products such as annuities lack the flexibility and returns compared to reliable alternative income products such as peer-to-peer lending.
