Half of UK adults plan to continue working in retirement
A study by the investment company has found an emerging “No Desire to Retire” generation with people expecting to retire from their primary job at 66, but 45 per cent expecting to work into their 70s, and almost one in 10 (9 per cent) into their 80s or beyond.
Fidelity says increased longevity has had a knock-on effect on working patterns. A child born today can expect to live more than a decade longer than a child born in the 1950s. Statistics from the Office of National Statistics (ONS) show that the proportion of those aged over 70 in full or part-time employment has doubled in the past decade.
Maike Currie, director for workplace investing at Fidelity International, said: “With 60 now widely seen as ‘the new 40’, today’s so-called retirees are healthier, living longer, and retiring at different ages. So, it is unsurprising that people have no desire to retire and are defying traditional expectations.
“The economic power of those who were once considered ‘past it’ can now be felt everywhere. This will transform the jobs market as more people work into their late 60s or even early 70s and they will have a growing influence on consumer spending as pension reforms allow them to cash in their lifetime savings and spend the money as they wish.”
With the government unlikely to consider any more increases to the state pension age (the last ones were finalised as recently as 2017), today’s “no desire to retire” generation face some significant challenges to ensure their finances are stable for when they retire.
“If you’re contributing to a workplace pension, make sure that you are maximising any help that your employer offers. Many companies will match what you’re paying, up to a certain level, so make the most of it,” advises Currie.
Fidelity International’s research also reveals those with the highest household incomes (with an annual income of more than £50,000) are more likely than those on lower incomes to plan to work in their retirement (58 per cent compared with 50 per cent).
This suggests that for some, choice plays a part in their decision. This seems particularly true given those higher earners expect to retire from their main job an average of two years earlier.
Those with a household income of more than £50,000 expect to retire at 65, while for those earning under £50,000 the retirement age increases to 67.
Similarly, Londoners were far more likely to have plans to continue working into their retirement (64 per cent vs a national average of 52 per cent), despite expecting to “retire” at 65, earlier than any other part of the country.
“Retirement is no longer the cliff edge it used to be – the important thing, however, is to have choice. Whether that be to work, to retire completely, or somewhere in between, it’s important for people to hit retirement age free from money worries, and with the ability to continue the lifestyle they have become accustomed to,” said Currie, “The solution lies in having a plan and knowing the amount they need to put away each month. This way, working in retirement can remain a choice, rather than a necessity.”