New research from Hargreaves Lansdown shows how retirement patterns are continuing to evolve and how the new pension freedoms can be used to meet investors’ needs. In a survey of investors who have drawn pension benefits in the first weeks of the new freedoms, we found.
35 percent of people who accessed pension freedoms in the first month were still working. 20 percent work full time and 15 percent work part-time. More than a third who work full time (37 percent) plan to switch to part time hours before stopping work. With almost six in ten yet to rule out moving part time, this phased transition or ‘semi-retirement’ seems to be a popular option with employees. Whilst 43 percent who took benefits plan to retire in the next three years, it seems that for many when they stop enjoying work is when they will call it a day.
People are still not planning far enough in advance. Almost half (43 percent) only thought about drawing benefits within the last 12 months. Nathan Long – Head of Corporate Pensions at Hargreaves Lansdown: ‘The pension freedoms look set to make semi-retirement the new norm. Employees seem keen to reduce their hours, whilst tapping their pension to replenish lost income. Employers must continue to look to workplace financial education to help employees understand their options and plan appropriately. Doing so will help increase engagement and allow the business get the most from the cost of the company pension. It will also help employees navigate the tricky transition from working to retirement, regardless of how long that transition might be.”
How long after drawing benefits do you plan to retire?
We surveyed the length of time after taking benefits before individuals planned to finish work completely. It seems that for many, when they stop enjoying work is when they will call it a day.
Advance planning
When respondents started planning for taking their pension and is dominated by very short planning periods.
Results are from a Hargreaves Lansdown survey of people who accessed their pension in the first month of the new freedoms. This totalled 304 respondents.
