The concept of retirement has completely changed, probably for all time. More of us are continuing in employment long past an age when previous generations were considered too old to work.
After years of increases, the number of people who retired before they were 65 peaked at more than 1 million in 2008 but that’s now down to 619,000. According to Aviva, the insurance company, early retirement will have virtually disappeared by 2035.
Research shows that taking a phased approach to retirement is the preference for half of UK workers over the age of 50 .
The reasons why are mixed. For some unfortunately it is down to not being financially prepared. High levels of debt or a fear of running out of money can be a big obstacle to stepping off the work treadmill.
Pensions that are not keeping up with the rising cost of living or elderly parents in need of expensive long-term care can also be factors, which is why independent professional financial advice is so important when planning for retirement.
For others, it’s down to choice – a passion for what we do makes us want to carry on doing it for as long as possible.
Many of us are fitter and more physically active in our 50s and 60s than our parents were. Life expectancy is at record levels and we can expect a much longer period of healthy, active retirement.
The Taste of Freedom
Whatever the reasons, the introduction of pension freedoms has been a huge enabler for over-55s, allowing millions to draw income from their pensions flexibly.
Pension freedoms offer the opportunity to transition into retirement by continuing to work with reduced hours beyond traditional retirement age.
This emerging trend enables you to choose a middle path, allowing for reduced working hours and more flexible quality leisure time, while also receiving your retirement benefits.
Tailoring Your Retirement
The flexibility that pension freedoms gives means that older workers can tailor their retirement to their own individual requirements, giving rise to a new distinct and more ‘free’ stage of life in between work and retirement.
A quarter (26%) of over-50s  could see themselves continuing to work while collecting their pension, but their motivation for doing so isn’t driven solely by economics. Keeping their brain active and an enjoyment of work as well as the benefits of social interaction all play their part
Earning an income later in life also provides workers with the opportunity to continue saving, which can mean higher retirement benefits in the future.
The research highlights that a work–life balance has never been more important to those over 55. Pension freedoms have allowed them to throw off the shackles of a traditional retirement and follow a plan that suits their individual needs.
While historically people benefitted from generous final salary pensions, one drawback of these was that they didn’t offer much flexibility to decide how and when to take benefits.
The pension freedoms have changed the way people think about retirement and are enabling the rise of a more flexible transition into retirement, including allowing people to choose to start accessing some retirement savings to support a reduced working pattern.
What You Need To Consider
It’s undoubtedly a thought-provoking time for many approaching retirement and it can be difficult to know which approach is the right one to take.
If you’re concerned about the value of your pension, remember you may have other assets that could help with your retirement, including other savings, investments or equity in your property.
It’s essential you have access to professional financial guidance and regulated financial advice at a time when you are deciding how you will receive an income for the remainder of your life.
With our help, you can create a plan of action to prepare you today for the life you want tomorrow. Get in touch to arrange a meeting.
 Research conducted by Aegon in conjunction with Opinium
THE VALUE OF AN INVESTMENT AND THE INCOME FROM IT COULD GO DOWN AS WELL AS UP. THE RETURN AT THE END OF THE INVESTMENT PERIOD IS NOT GUARANTEED AND YOU MAY GET BACK LESS THAN YOU ORIGINALLY INVESTED.