Two-thirds of 2022 retirees opting for flexi-retirement; advice take-up remains low

Two-thirds (66 per cent) of people retiring in 2022 do not plan to give up work completely, compared to 56 per cent of those retiring in 2021 and 34 per cent of 2020 retirees, according to Abrdn’s latest ‘Class Of’ report.

The research suggested that a new ‘flexi-retirement’ trend is emerging, after revealing that nearly a quarter (24 per cent) of the 'class of 2022' will go part time in either the same job or a new one.

In addition to this, around one in six (15 per cent) plan to continue to work for their own business, and around 12 per cent plan to become entrepreneurs and start their own business.

The need for income was a key reason for a ‘flexi-retirement', alongside the desire to keep busy, cited by 31 and 32 per cent of respondents, respectively.

This is perhaps unsurprising, with 25 per cent of retirees feeling very confident they have enough saved for retirement, down from 30 per cent in 2021, and a further 27 per cent of the class of 2022 unsure how to mitigate the impact of rising inflation on their retirement income.

However, of those planning to reduce their hours or getting a part time job, 28 per cent have taken financial advice on this decision, whilst only 25 per cent are aware of the tax implications of dipping into their pension while working and saving into their pension.

More broadly, the report revealed that 82 per cent of the class of 2022 have not sought any professional advice about their plans to retire this year, with 9 per cent admitting they have not even spoken to friends or family.

Abrdn financial planning client director, Colin Dyer, highlighted the findings as demonstration that the class of 2022 "are challenging the norms and doing what works for them".

He continued: “Hearing why retirees are choosing to work really underlines the importance of taking a holistic approach to retirement and how sensitive plans can be to external issues, such as the surge in the cost of living or the pandemic.

“Working in retirement can have wider financial implications, all of which need to be planned for. This can seem complicated, but that’s where preparation and speaking to an expert can help."

However, Dyer noted that lots of people are not seeking any professional help with their retirement plans, warning that with the current pressures of the cost-of-living crisis, this could put them in "an incredibly vulnerable position".

"A financial adviser can help assess what people need to think about and what steps to take as a result – ultimately giving them the confidence to proceed with their plans to secure their future in a way that suits them," he continued.

"More needs to be done to make seeking advice the norm and seeking it earlier to ensure retirees feel confident both financially and emotionally as they approach this new chapter in their lives.”

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