By Claire West
A third of retirees (33%) say they were pushed into retirement because their employer suggested it or because they “reached the normal age” at their workplace, according to Aviva’s latest Real Retirement Report. The report reveals that there is going to be a significant shift in how people approach retirement, as the Government removes the default retirement age in April 2011. This means that almost 700,000 people who reach retirement age each year will have the freedom to stop working at a time which suits their individual lifestyles and finances.
However, while the “Do It Yourself” approach to entering retirement is likely to rise, some people may still be forced to finish their careers prematurely. One in five (20%) retire due to chronic or age-related health conditions; and 11% retire as they were made redundant and felt it was “too late to get another job”.
Rise in career down-shifting:
There is already strong evidence that those approaching retirement do not see the move from employment to retirement as a clean break. In the latest report, Aviva has identified a trend towards down-shifting or people looking to reduce their work commitments prior to finishing work. Currently, 58% of over-55s have chosen to down-shift – starting to do so at an average age of 57 — but this is expected to increase.
Down-shifting takes a variety of forms with 21% working fewer days and 15% working fewer hours, while remaining in the same career. Others have switched to a different form of employment with 16% deciding to move to a less stressful role; 11% undertaking consultancy work; and 11% turning a hobby/interest into an income-generating career.
The top three jobs that over-55s consider ideal as “part-tirement” roles are office administration (13%), full-time or supply teaching (7%) and working in a shop (7%).
Six in 10 (60%) over-55s do not want to keep working for their current employer past the current retirement age (60 for women and 65 for men). This highlights the fact that while people do want to remain economically active, they are looking for a more flexible approach to work or new challenges.
Clive Bolton, ‘at retirement’ director from Aviva comments: “The removal of the default retirement age provides people with the freedom to design their own retirement. Some people will naturally choose to stop work when they start claiming their state pension, but many are likely to continue working as they genuinely enjoy their roles and gain both social and financial benefits.
“As part of this move to DIY retirement, we expect to see more people down-shift their careers as they look for more flexibility and less pressure in the final few years of their working life. However, that said, a fifth of people retire due to health issues so while people can choose to work into later life, any additional boost to their finances should not be relied upon.”