Pre-retirement predicament

Older generation choose to work into later life amidst family concerns

More than a third (34%) of over-55s plan to continue working past what would previously have been considered their retirement age of 65, according to figures released from Scottish Widows think tank the Centre for the Modern Family.

T he research found that a third (33%) of over-55s plan to continue working in some capacity as they approach retirement, with a further 45% unsure or yet to make plans for later life, suggesting fewer people are choosing linear career paths and traditional approaches to work followed by retirement.

Opportunity to continue working
The number of over-65s choosing to continue working has risen 26% to 1.1 million since the abolition of the default retirement age in October 2011, and despite the difficulties facing many ‘pre-retirees’, a growing number of older workers are taking the changes to legislation as an opportunity to continue working for their own well-being. The Centre for the Modern Family research found a significant gap between those who want to carry on working versus those who need to continue earning.
Over half (54%) of those who choose to stay in employment said that they don’t feel old enough to retire, and 24% want to keep working because they enjoy their job and want to continue their professional development. The study highlighted that one in five men (17%) and one in ten women noticed improvements in family relationships as a result of spending more time independently.

Financial pressure
The changing shape of the family unit has also impacted the possibility of retirement for many over-55s, with ageing relatives and boomerang children adding financial pressure at both ends of the spectrum. Almost a fifth admitted that they will continue to work in order to support their family financially, yet 17% felt their ability to do their job is impacted because they are tired and stressed from balancing work and family life.

Almost half (44%) of over-55s who plan to continue working also said they will need to do so in order to supplement their pension, and a further 13% still have debt or a mortgage to pay off. More than half (54%) of over-55s admitted that they are already struggling to make ends meet and have had to adjust their spending habits before considering life on a pension. Almost a quarter (23%) say they have spent their savings or contribute less to savings now (24%) as a result of living costs in the last year, while a third (33%) have cut down on leisure spending.

Gender gap
The research also uncovered a new trend of the ‘unretired’, with 15% of men and 9% of women returning to work post-retirement, and a further 25% and 29% respectively saying they would be willing to do so.

A noticeable gender gap appeared between desire and necessity, as the majority of men (57%) said they returned to work because they were bored or restless, but the main reason for women (38%) was the need for money to meet day-to-day family costs. However, a fifth (20%) of retired women who would not return to paid employment after retirement said it was because they had too many family commitments.

Regardless of the motive for continuing or returning to work, feelings amongst family members are yet to catch up with the attitudes of the workers themselves. This suggests that older workers are juggling competing priorities as they try to balance the demands of their finances, family life, health and jobs.

Health implications
The research highlighted that 23% of people worry about the health implications of working longer for their older relatives. Family members also worry that for older relatives, choosing to work for longer could have a negative impact on their family, with 18% saying they feel both older and younger generations will have less time to spend together as a result. Almost one in ten (9%) said it would make managing their own work and family life balance more difficult – a figure which rises to 13% among parents with children under 18.
However, positive signs are emerging that families can spot the benefits of a longer working life, both on health and family relationships. More than a quarter (27%) feel that older relatives will be able to remain active for longer, while 23% feel they become good role models for younger generations. Almost one in ten (8%) also feel it will relieve the burden of financially supporting older relatives financially later in life.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.

A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN. YOUR EVENTUAL INCOME MAY DEPEND UPON THE SIZE OF THE FUND AT RETIREMENT, FUTURE INTEREST RATES AND TAX LEGISLATION.

Source data:
This report is based on both quantitative and qualitative inputs, including a nationally representative YouGov survey of 2,000 adults, a further YouGov survey of 500 business leaders spread across all sizes of employer, interviews and discussions with the Centre for the Modern Family panellists, and a series of focus group sessions also conducted by YouGov.