There can be few people who are genuinely untouched by the rapid rise in the cost of living. And that includes the about to retire and, more often, the already retired.
According to a recent poll by an insurance company, saving for retirement was the highest-ranking concern for adults in the UK. Equally a poll by My Pension Expert in the early summer discovered that 12% of those surveyed said inflation had derailed their future retirement plans.
But what of those who have already retired? According to the ONS (Office for National Statistics):
“In April to June 2022, the number of people aged 65 years and over in employment increased by a record 173,000 on the quarter to 1.468 million, which is also a record level.”
Much of the work undertaken is part time with fewer hours. However, this has a plus side. Unretiring pensioners are taking jobs in some of the hardest hit areas of the economy in terms of staff shortages, including hospitality, the arts and recreation.
Working and claiming your pension
If you are over the state pension age, you can work and draw a pension, no problem. What’s more, you won’t have to pay any National Insurance on your wages.
BUT, beware of the reduced allowance known as MPAA. Whilst working before drawing your pension, you could contribute up to £40,000 every year into your pension pot without being taxed.
However, as soon as you start to draw your pension income, the Money Purchase Annual Allowance plummets to just £4,000. So it’s important to talk through any plans to return to well-paying work after retirement with your financial advisor.
Available but not always suitable
With unemployment at a record low, many employers are crying out for new staff across a diverse range of positions. However, an available job isn’t necessarily a suitable job. According to an ONS survey, the top three considerations for those looking for a post-retirement job were:
- 32% – Flexible working hours
- 23% – Good pay
- 12% – Able to work from home
A change of direction
Interviewed for an article in The Express, one former teacher described how she found a new job demonstrating cookery products after retiring from a 28-year career.
“Given the current cost of living increases we are facing, (this job) is giving me additional financial security. It helps to pay for little treats that we share with our children and grandchildren and most definitely helps towards the rising cost of petrol and electricity bills.”
Working to keep active
As I’ve said many times before, working in retirement isn’t just about extra money. Being part of a work team can help you keep your mind and body active, and give you a social circle and network to be part of. It also gives your retirement purpose, plus an added layer of financial security in a time of economic uncertainty.
An article in The Guardian also highlights another reason; it’s a way to fund the voluntary work and grandparent duties that also give purpose and meaning to retirement. As one pensioner explained, the hardest part about unretiring might be just telling people you’re working.
“I think a lot of people are embarrassed that they are having to return to work, so they won’t talk about it. But it’s happening everywhere.”
Want to unretire but not sure quite how?
Come and talk to me. I offer 1 to 1 retirement coaching that covers all aspects of retiring with purpose, only one part of which is financial planning. Taking a holistic view of retirement can show you want to want to do and how to achieve it, rather than focussing on affordability all the time.
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