According to a new study from insurance company Aviva, more than two in five (44%) individuals aged 55-64 plan to enter “semi-retirement” before they turn 65.
This allows them to draw from their pension savings while still working part-time. The research comes from the fourth edition of Aviva’s “Age of Ambiguity” study, which delves into the changing attitudes toward work and retirement that have been accelerated by the Covid-19 pandemic.
Aviva’s study shows that people’s emotional and financial well-being has shifted in the face of post-pandemic professional uncertainty. More than nine in ten (91%) people described themselves as “much happier” since reducing their working hours.
Semi- or partial retirement, also known as “part-tirement,” could be the answer for more than half (55%) of workers who like the idea of continuing to work through retirement, giving them freedom in later life while remaining part of the workforce.
The study reveals that elongated working lives are encouraging younger people to consider a flexible approach to working in later life to maintain their career. Almost three in five (59%) 18-34-year-olds say they plan to semi-retire before the age of 65, rising to 61% of those aged 35-44.
Retirement can form up to a third of an individual’s life as life expectancy continues to increase, and more people than ever are living to 100 and beyond. Recent changes in government policy, including the planned increase in the state pension age to 67 from 2028, have led people across all age groups to re-evaluate their plans for work and later life.
Recent data from the Office for National Statistics (ONS) shows that 48,000 over-50s have recently returned to the workforce, as Chancellor Jeremy Hunt urges people who have already retired or are considering retirement to think about partial or full-time employment to help solve some of the UK’s labour shortage issues.
However, Aviva’s research suggests that people are in favour of staying in employment beyond their retirement age, suggesting that the problems the UK faces with workplace participation will not exclusively be solved by encouraging people to return to work.
Aviva’s report suggests that continuing to work can help improve mental and physical health, which informs overall wellbeing.
It can also keep loneliness and isolation at bay. Semi-retirement can offer a mutually beneficial solution for employers and employees, as companies benefit from retaining the expertise and knowledge of skilled staff within the workforce, and workers can make choices about maintaining a healthy lifestyle and income in retirement.
The desire to retire early is often driven by individuals wanting to take advantage of more freedom while still being physically fit and well enough to enjoy it.
As the workplace continues to evolve, Aviva’s report offers practical solutions around how employers can provide welcoming, cross-generational workplaces. “Mastering the Age of Ambiguity” gives employers the tools needed to create a winning workplace culture that values its staff, increases employee retention, and staff wellbeing altogether.
Michele Golunska, managing director for Wealth and Advice at Aviva, said that in a climate where longer working lives are becoming the norm, semi-retirement is a chance to experience the “best of both,” which can benefit both employees and employers. Retaining a connection to the workplace is an appealing option for many people who are still working towards their financial goals or are not ready to stop working.
Aviva’s Mid-Life MOT app provides a number of tools to help people between 45 and 60 think about themselves more.
“As people live longer, investing time in ourselves and considering every option available in later life is the best way to ensure we have the retirement we aspire to”, Golunska added.
“Starting to think and plan further ahead is a small step that can make a big, positive difference in the long-term.”
