Flexi-retirement is becoming increasingly common, as more and more retirees are opting to work part-time in the gig economy.
According to a new report from Abrdn, two thirds of people retiring in 2022 do not plan on giving up work completely.
This compares to just over half of those who retired in 2021 and a third of 2020 retirees.
The report, which surveyed 2,000 UK adults, reveals how the “class of 2022” plan to spend their and money in retirement.
A quarter said they will work part time with either the same job or a new one. One in six said they would continue to work for their own businesses.
Just over one in ten plan to become entrepreneurs and start their own business.
The main reasons cited for flexi-retirement included the need for income for 31% of respondents and the need to keep busy for 32%.
Abrdn Financial Planning client director Colin Dyer said: “Gone are the days when everyone had a set date or a set age from which they’ll never work again.
“The emerging trend for ‘flexi-retirement’ for financial reasons, or just to keep busy, is here to stay. The class of 2022 are challenging the norms and doing what works for them.
“Hearing why retirees are choosing to work really underlines the importance of taking a holistic approach to retirement and how sensitive plans can be to external issues, such as the surge in the cost of living or the pandemic.”
The report also identified how prepared the class of 2022 is for what is to come and how factors such as the rising cost of living and the pandemic are affecting their plans.
Only a quarter of this year’s retirees feel very confident they have saved enough to fund their retirement. It compares to 30% for the class of 2021.
A key factor for this drop in confidence is the rising cost of living. More than a quarter said they do not know how to mitigate the impact of inflation on their retirement income.
When it comes to funding their retirement, one in five will use their state pension as their main source of income.
For others, their main income source will break down as follows: 15% savings and investments, 13% defined benefit/final salary pension, 12% private pension pot, and 12% defined contribution workplace pension.
When it comes to discussing retirement, the class of 2022 are most frequently turning to partners, children, and friends.
Yet, less than a fifth have sought advice from a professional adviser about their plans to retire.
In fact, only 28% of the class of 2022 who plan to reduce their hours or get a part-time job in retirement have taken financial advice about this decision.
Just a quarter are aware of the potential tax implications around dipping into their pension while still working and still saving more into their pension.
One in ten have not spoken to anyone about their plan to retire this year.
Dyer added: “Working in retirement can have wider financial implications, all of which need to be planned for. This can seem complicated, but that’s where preparation and speaking to an expert can help.
“A financial adviser can help assess what people need to think about and what steps to take as a result – ultimately giving them the confidence to proceed with their plans to secure their future in a way that suits them.”
In addition, 72% of the class of 2022 will relocate in retirement, with 19% looking to move closer to family. About 31% will downsize to either free up space or make money.
City life remains a popular choice for retirees with 23% wanting to retire in a city. Also, 15% are considering moving abroad after retiring.
