Cost of living bites
Retired plan return to work to make ends meet
Thousands of retired people are planning to return to work as the cost of living bites into their investment pots.
More than 733,000 retirees across the UK are thinking of getting a job to help make ends meet, according to new research.
My Pension Expert, the at-retirement adviser, commissioned an independent survey of 2,000 UK adults which found that, for 12% of those in retirement, rising inflation has “upended” their retirement plans.
With inflation hitting 9.9% and expected to rise to 15% or higher by the start of 2023, more than a third (34%) are worried they will no longer be able to sustain their desired lifestyle.
The research found that 6% of the UK’s 12.2 million retirees are likely to return to the workforce in the coming months to top up their pension pots.
Fewer than half (46%) of respondents said they are confident in their current financial strategy.
Andrew Megson, executive chairman of My Pension Expert, said: “As the cost-of-living crisis bites harder, we’re seeing a worrying spike in ‘unretirement’.
“It’s a hugely important issue – after working and saving for decades, having to re-enter the workforce will be a bitter blow to many retirees.
“The reality is that many people’s pension pots are losing value in real-terms amid sky-high inflation. And as such, their hard-earned retirement funds won’t stretch as far or sustain the same lifestyle.”
Pension age may rise further
The return to work coincides with speculation that the state pension age will be raised to 68.
The retirement age was increased for men and women from 65 to 66 in 2020 and is due to rise to 67 by 2028, but it could be brought forward to ease pressure on the public finances.
The current plan is to raise it to 68 between 2044 and 2046 for those born on or after 5 April 1977. This could also be brought forward to between 2037-39.
A report by the Government states: “In 1948, when the modern State Pension was introduced, a 65-year-old could expect to live for a further 13½ years, or 23 per cent of their adult life, assuming adult life starts at 20. In 1995, when the first changes were enacted to equalise State Pension age, a 65-year-old could expect to live for 18½ years, or 29 per cent of their adult life.
“This had risen to around 21 years by 2007, or 32 per cent of their adult life, when further legislation was introduced to increase State Pension age.”