Last year, some 11.5% of the UK population continued working after the age of 65 – more than double the proportion just a quarter of a century earlier. Now, new research shows that the traditional “hard stop retirement” is fast becoming a relic of a bygone age, with just 16 per cent of UK adults expecting to stop work completely and enter full retirement. Tony Watts OBE looks at the financial implications.

Got a date in your diary for when you clock off for the last time and start to live off whatever savings, pensions and investments you have managed to accrue?

If so, you’re one of quite a small minority.

In fact, new research from Aegon as part of its Second 50 campaign suggest that only 16% of UK adults plan to stop working completely and enter full retirement after they reach State Pension Age (currently rising to 67 between April 2026 and April 2028).

The remaining majority anticipate taking a more flexible approach to later life – ignoring the traditional “hard stop” approach to retirement.

It’s a far cry from how retirement has traditionally been perceived, and the result of a series of trends joining forces: among these, better health for many in their later years and a less ageist attitude among some (if not all) employers have helped, along with the Employment Equality (Age) Regulations coming into force 20 years ago.

Financial pressures

There is also a recognition by many that they simply won’t have enough tucked away to enjoy a comfortable retirement. A recent poll by Independent Age revealed that 55% of UK adults under 65 are not confident they will have enough money to sustain a comfortable retirement.

Aegon’s own survey reinforced this: 23 % said they would absolutely need to continue working because they have not saved enough. On top of that, a further 20% are harbouring concerns that will have saved enough by the time they reach 67 and 17% actively expect their retirement income to be lower than they had anticipated.

Those figures are reflected in the fact that just over half (53%) were confident they could maintain a lifestyle which they considered “comfortable” throughout their retirement.

Not just a matter of money…

But joining the ranks of the “unretired” can be a positive choice too.

Again according to the Aegon survey, the most quoted reasons for people wanting to remain in work were wishing to keep their brain active (41%), maintaining a good work-life balance (35%), supporting their physical and mental health (30%) and actually enjoying work and working life (24%).

Recent changes in the workplace have actively contributed to this, with some 16% saying they feel empowered to continue working and/or have been enabled to do so through hybrid and remote working (11%).

Kate Smith, head of pensions at Aegon UK, comments: “Life after 50 looks very different compared with previous generations, and for many it can feel like uncharted territory.

“Retirement is no longer viewed as a single moment in time. Instead, people are increasingly thinking about how work can fit alongside other priorities and aspirations in later life.”

The challenges ahead

While the figures for those looking to remain in work after State Pension Age look set to rise, one barrier could be a slowdown in the economy which seems to be hitting those at either end of the age scale hardest. There has been a lot of coverage recently about the near-one-million “NEETS” – young people not employed or in education or training.

But a similar number of people between 50 and 66 are in the same boat… actively interested in working but unable to find a job.

And that’s not being helped by a lack of support for this cohort. According to the Centre for Ageing Better: “While both groups are vulnerable in a weak labour market, the government has focused its attention almost entirely on tackling the youth unemployment crisis including announcing £820m in funding in last year’s Budget.

“In contrast, there have been no major announcements or programmes to help tackle the 50+ employment crisis.”

So, getting back into employment should you be made redundant potentially poses as much of a problem going forward, making it critical that older workers keep their skills set up to date as well as being prepared to change roles within organisation… potentially into mentoring.

So, will you be retiring at YOUR chosen date? How we can help!

According to Pensions UK’s updated Retirement Living Standards figures, a moderate retirement now costs £32,700 a year for a single person household and £45,000 a year for two. Currently, only 23% of workers are expected to save enough by the time they want to retire to afford this, ​

Even fewer, a mere 9%, are on track for what the Standards define as a “comfortable” retirement, which they calculate at £45,400 and £62,700 respectively.

Does this tally with your ambitions in retirement… or are you looking at living on less or more?

Either way, using your RetireEasy LifePlan, you can see in minutes how much you can comfortably draw down from your funds in every year of your retirement.

Moreover, if the figures look like coming up short, you can run different scenarios to show what difference it would make if (for example) you delayed your retirement, changed roles for a lower income, saved more or took out a lifetime mortgage.

All this for just a few pounds a month!