A number of pensioners are opting for a staggered retirement and working part-time before giving up work completely to make sure their pensions last the rest of their lives, according to new research from LV=.
The LV= survey of more than 1,000 adults aged over 50 with defined contributions found that nearly one on three (32%) pensioners in their 60s and 16% of over-70s have left their pensions untouched.
Of those who haven’t accessed their pension pot, nearly half (48%) of those in their 60s, and 24% over 70s, say it is because they are still working.
With people living longer, and the added prospect of health care costs in later life, retirees increasingly understand the benefits of having a larger pension pot in later life. Of those who haven’t accessed their pension pot, half (51%) say it is because they are still working while more than a quarter (25%) of people in their 60s say it is because they want their pensions to last as long as possible.
Of course, retirees who haven’t accessed their pension pot must have alternative sources of income. When asked about their income. Nearly half (47%) said they take an income from cash savings (47%), others rely on their spouse/partner’s income (35%) or State Pension (22%) while 12% rely on income from property investments (12%).
Clive Bolton, managing director of savings and retirement at LV=, said: “It is encouraging to see that people are working longer as the barriers to working past retirement age fall away. This trend for staggered retirements is good news because continuing to work offers many financial and health benefits. It is often taken for granted but continued good health is one of the best financial assets people can have. The benefits of working – such as remaining physically active and continued social interaction – can make a big difference to people’s mental wellbeing and overall health in retirement.
“People are making sensible choices about retirement to ensure that they do not run out of money, but it’s also really important that they also make their pension savings work for them past retirement age so they don’t miss out on the ability to generate growth above inflation for when they are ready to start to draw their pension.
“There are lots of product and fund choices available to help achieve this and it’s a good idea to seek help from a financial adviser so that people can enjoy the retirement they want.”