According to the Office for National Statistics, the number of people over 65 in work or looking for work hit close to 1.5million over the summer — their highest level on record. With the uncertainty of the triple lock causing distress and the state pension getting eaten up by inflation, many older people may be considering reversing or altering their retirement plans.
Zoe Dagless, senior financial planner at Vanguard spoke exclusively to Express.co.uk about a phenomena being described as “the great unretirement”.
Ms Dagless discussed the benefits of delaying retirement a few years to make sure people can avoid financial hardship if possible.
She said: “The cost of living squeeze may be prompting some retirees to think about going back to work. A few extra years of employment can greatly enhance your retirement security.
“Just how much becomes obvious if you play around with an online pension income calculator.”
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She gave an example. Someone with a £10,000 investment who is 10 years from retirement that contributes £500 a month at an annual five percent would receive £93,784 at retirement.
Just two more years of contributions would see the total retirement pot reach £116,028.
Ms Dagless continued: “That’s a sizeable difference of £22,244.
“If you haven’t retired yet and are thinking of doing so soon but can put it off a while longer, just until the economic climate improves, then it’s certainly worth considering a delay.”
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She explained recent work by Vanguard’s US researchers found the ‘great retirement’ of the pandemic saw many older workers leave the workforce earlier than expected.
This could turn into the ‘great sabbatical’ as the combination of higher inflation and weaker markets forces many of them to return to make up shortfalls in their retirement funding.
The one-off suspension of the state pension triple lock last April means that the state pension only increased by 3.1 percent, while inflation increased at 10.1 percent in September.
Caroline Abrahams, the charity director at Age UK, said it was no wonder significant numbers of retired people were “scrambling to return to work in an effort to shore up their finances against the storm”.
She said: “Judging from what we’re being told at Age UK, many older people are looking ahead to the winter with extreme trepidation.
“With inflation high and rising we can see why: the prospect of scrambling to afford to keep the heating on is truly frightening.
“Carefully laid retirement plans, which looked economically sustainable a year ago, are now shot to pieces and that’s a huge disappointment if you’ve been looking forward to a rest and the chance to enjoy yourself after many years of working.”
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