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Flexi-retirement trend on the rise amid surge in working retirees

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·Business Reporter, Yahoo Finance UK
·3-min read
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Retirement: Close up of a senior couple going over their home finances
A quarter of those asked will go part time during retirement with either the same job or a new one, one in six will continue to work for their own business, and just over one in ten plan to become entrepreneurs and start their own business. Photo: Getty

A growing number of Brits are taking a flexi-retirement, with retirees embarking on part-time work and seeking roles in the gig economy.

According to a new report launched on Wednesday from insurer Abrdn (ABDN.L), two thirds (66%) of people retiring this year do not plan on giving up work completely.

This is in comparison to over half (56%) of those who retired in 2021, and a third (34%) of retirees in 2020.

The report, which surveyed 2,000 UK adults, revealed that a quarter (24%) of those asked will go part time with either the same job or a new one, one in six (15%) will continue to work for their own business, and just over one in ten (12%) plan to become entrepreneurs and start their own business.

The main reasons cited for "flexi-retirement" included needing the income amid the rising cost of living, and wanting to keep busy.

Read more: Brexit: Over 7,000 finance jobs traded London for EU

More than a quarter (27%) said they did not know how to mitigate the impact of rising inflation on their retirement income, while one in five (20%) said the state pension was their main source of income, which is currently struggling to keep pace with inflation.

The research added that 56% of retirees last year have continued to work and 41% of them have decided to seek financial advice on the matter.

A third (32%) of 2021’s retirees who are still working have joined or are planning to join the "gig economy", taking up employment with companies such as Deliveroo (ROO.L) and Uber (UBER).

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“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,” Colin Dyer, client director at Abrdn financial planning, said.

“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.”

Abrdn said that of those who plan to reduce their hours or get a part-time job in retirement, less than three in ten (28%) have taken financial advice about this decision.

Read more: Mortgage delays cause nearly 40% of purchases to fall through

Just a quarter (25%) are aware of the potential tax implications around dipping into their pension while still working and still saving more into their pension.

He 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.”

Watch: How does inflation affect interest rates?

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