The changing face of retirement


The changing face of retirementNew data has confirmed just how different our retirement and working habits are becoming later in life.

Figures from the Office for National Statistics (ONS) show that between 2008 and 2012 just over 350,000 people became newly self-employed, with baby boomers leading the way and accounting for over 80% of the rise.

The ONS figures confirm a huge divide between the generations, with 37% of workers aged over 65 registered as being self-employed, compared to just 5% of 16 to 24 year olds. Experts believe that older people may be forced into self-employment due to a tough employment market, whilst being more experienced and possibly having easier access to start up funds, might make it less challenging for this group to start their own business.

However, the data shows that being self-employed is far from an easy option, with people working for themselves putting in an extra two hours per week compared to employees.

Reluctant retirees

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The ONS self-employment data makes interesting reading alongside a new survey from the Prudential, which shows that around a quarter of all new retirees are reluctant to do so.

Since the financial crisis, the days of the ‘cliff edge’ retirement, where work stops completely one day and retirement starts the next, seem to be over for many people. The Prudential survey found that 57% of people surveyed would consider working past the State Pension age, although most would prefer to work part-time in retirement rather than full-time.

According to the survey, people have different motivations for working past the State Pension age, with 40% of people continuing to work because they have to, with the same number doing so because they enjoy work.

Why are retirement habits changing?

There are a wide range of reasons why people’s work and retirement habits are changing in later life and why for many, a ‘cliff edge’ retirement, where they completely stop all work at retirement, is becoming far less common than it once was.

Most of the reasons for the changes are linked to the financial crisis, which led to many people losing their jobs, and older generations finding it harder to find re-employment, leading many to start their own business.

The effects of the financial crisis have perhaps hit would-be retirees the hardest. Not only has this group had to put up with increased job insecurity, their pension values have generally fallen, as any pension Annuity calculator will show you Annuity rates have plummeted, as have interest rates on savings accounts, whilst inflation has been relatively high for the past few years eroding the value of savings and fixed incomes.

This ‘perfect storm’ for would-be retires has clearly forced many to change their plans, perhaps becoming self-employed, or indeed joining the group of reluctant retirees.

Our team of Independent Financial Advisers in Nottingham are experienced in developing retirement income strategies for clients the length and breadth of the UK. If you are approaching retirement and would like advice on your options call one of our IFAs today on 0115 933 8433, alternatively enquire online or email