No Pension For Us Until We've Finished Our 'Pre-Tirement' – Say the Class of 2016
19 February 2016
- Fourth consecutive year in which more than half of planned retirees will consider working past their State Pension age
- This year’s retirees expect to be drawing their pension for over 20 years
- Just under a quarter of those scheduled to retire in 2016 have postponed their plans as they can’t afford to give up work
A period of ‘pre-tirement’ where people delay their retirement plans, change jobs or go part time instead of giving up work altogether has become the new norm, according to Prudential’s latest research1 into this year’s retirees – the Class of 2016.
The findings show that more than half (51 per cent) of those who currently plan to retire in 2016 are either already working past their respective State Pension age or would consider doing so when they reach that landmark.
Prudential’s research into the retirement finances and aspirations of people planning to retire in the year ahead is now in its ninth year. This year is the fourth in a row in which more than half of those who are due to retire have already chosen to work past their State Pension age or would considering doing so if it led to a boost in their income in retirement.
Of those working or considering working beyond their State Pension age, 29 per cent say they would change employers to do so. However, more than a quarter (27 per cent) would stay in their current job but reduce their working hours, while one in ten (11 percent) would stay on full-time in the same job.
The Class of 2016 expect to be retired for an average of just over 20 years and give a range of reasons for putting off their retirement, and for many the decision is a financial one. Nearly three in ten (29 per cent) of those planning to retire this year say they do not believe that their pensions and other savings will provide a sufficient income to support a comfortable life in retirement. Meanwhile, just under a quarter (22 per cent) of those scheduled to retire in 2016 have postponed their plans as they simply cannot afford to give up work.
Prudential’s research also found a number of non-financial reasons for the growth of ‘preretirement’. More than half (51 per cent) of the Class of 2016 who are already or are considering working past their State Pension age say they’d prefer to carry on working to keep their mind and body active. Many don’t feel ready to retire (34 per cent) or enjoy working too much to give up (41 per cent), while one in six (16 per cent) of those who have put off retirement say they never want to retire at all.
Stan Russell, a retirement income expert at Prudential, said: “With this year’s retirees preparing to spend an average of 20 years retired it’s understandable why they now see giving up work as a gradual process rather than a one-off event.
“However, for everyone who can choose their retirement date there are some who have no choice because they physically can’t continue at work, and others whose financial situation forces them to stay on. Anyone looking to give themselves the greatest degree of choice of when to give up work should be trying to save as much money as possible as early as possible during their careers.
“Most people will have an idea of how they’d ideally like their retirement to pan out, and regular discussions with a professional financial adviser can help to make sure that retirement finances are sufficient to turn these ideas into reality.”
For the members of the Class of 2016, planning for ‘pre-tirement’ isn’t limited to the decisions they make about work – for many it is about improving their quality of life more generally. They are already looking forward to doing more exercise (44 per cent), eating more healthily (36 per cent) or doing some voluntary or charity work (26 per cent).
Of those considering working beyond their State Pension age, an enterprising seven per cent would like to start their own business while one in eight (13 per cent) would like to try earning money from a hobby.
Notes to editors
1 Research Plus conducted an independent online survey for Prudential between 25 November and 8 December 2015, among 9,318 Non-retired UK adults aged 45+, including 1,000 planning to retire in 2016.
You can find previous stories from the Class of 2016 research at: www.pru.co.uk/press-centre
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