According to research from annuity provider, Retirement Advantage, one in five over-50s have changed their retirement plans because of pension freedoms. And, of those, 44 per cent are planning to bring forward their retirement. Of those who have changed their plans because of the pension freedoms, 28 per cent of respondents said they were now planning to retire later. On average, men expect to retire one year earlier, while women do not envisage retiring earlier.
The research, published in the company’s annual Retirement Sentiment Index, is based on Censuswide polling conducted in March this year with 1,003 adults aged 50 and over who were not retired and had a defined contribution or individual pension.
Retirement Advantage said savers were vulnerable to a kind of ‘demob fever’ at retirement but could suffer later on. While pension freedoms has given people the ability to access funds from age 55, this should not necessarily be a starting point to doing that. The firm suggests instead that whatever decisions people make on the back of flexibility around their pension choices, a critical first step should be to consult a professional financial adviser.
Interestingly, the figures also show that many people are looking to continue working in retirement, some part-time. Nearly a third (29 per cent) of people changing their plans are looking to work part-time in retirement; while 41 per cent of women over 50 anticipate working part-time in retirement, only 20 per cent of men plan to do so.
Another recent survey, this time from Aegon, says that more than a quarter of Britons (27 per cent) believe they will be working well past traditional retirement age into their 70s, as the majority think they will be fit and healthy.
“It’s clear that people no longer expect to retire at as early an age as their parents and the State pension age is not the defining ‘retirement moment’ at which they stop work,” said Steven Cameron, pensions director at Aegon. “For some, working beyond the past ‘traditional’ retirement age will be a lifestyle choice, but for others who put off planning ahead, it could be a financial necessity to cover living costs.”
However, Aegon warned that it was risky to expect to go on working indefinitely with no fall-back plan and we would agree. Making a pension plan which assumes you’ll be fit and healthy enough to simply keep working into your 70s and beyond might seem feasible when you’re in your 50s or 60s, but it’s hard to predict your circumstances at that point. The reality is that while you might remain in good health, others around you might need your support.
That said, there is nothing wrong with making a retirement plan which does include some work – as it could well be something you enjoy and your experience may well be useful to the business or businesses you are supporting. But, it’s sensible not to make that your only option.
At The Goodman Partnership, we can help you to understand if your lifestyle needs can be met in retirement – taking into account your particular circumstances and goals and then specifically discussing how you might actually draw from your various pension schemes.
Give us a call on 01892 500600 or click here.