Client
Portal

The future of retirement

Back to News & Views

Experiences of the past and potential future scenarios

The latest research reveals a significant disparity in perceptions regarding retirement experiences of the past and potential future scenarios. Over the past 50 years, a ‘hard stop’ or ‘transitional’ retirement has been the predominant way people have transitioned into retirement. A ‘hard stop’ refers to an abrupt end to working life, while a ‘transitional’ retirement involves gradually reducing working hours.

However, the ‘hard stop’ retirement is anticipated to diminish considerably in the future. Only 15% of UK adults believe it will represent most people’s experience in the next 10-25 years, indicating a paradigm shift in how future generations envision their retirement.

Changing retirement trends

The most notable shift between past and future retirement perceptions is a substantial increase in individuals never fully retiring because they want or need to continue working. Currently, 41% of UK adults expect this to be the norm in the next 10-25 years, a significant rise from 13% in the past[1]. This change can be attributed to several factors, including increased life expectancy, the rising cost of living and the desire to stay mentally and physically active.

Research focusing on hopes versus expectations of transitioning to retirement reveals that 44% hope for a ‘hard stop’, 47% hope for a transition period and just 9% hope to keep working. However, the expectations paint a different picture.

Planning for retirement

Only 30% expect a ‘hard stop’, 46% anticipate a transition period and 24% foresee continuing to work. Among those yet to retire who hope for a hard stop, only 52% realistically expect to achieve this, and one in five (19%) believe they will need to keep working. This divergence between hope and reality underscores the complexity of planning for retirement in today’s economic climate.

The concept of a ‘hard stop’ retirement has been replaced mainly by those looking to gradually reduce their working hours, combining part-time work with pensions to supplement their income. This approach allows retirees to maintain a sense of purpose and social connections while easing into retirement. While gradual transition remains popular, our research indicates a significant shift, with more people expecting to work indefinitely. This trend is expected to be driven by financial necessity and personal preference.

Flexible, part-time and remote work

Technological advancements and the rise of the gig economy also play a role, providing opportunities for flexible, part-time and remote work that can be tailor-made to suit the needs of older workers. For instance, consulting roles, freelance opportunities and online businesses allow individuals to leverage their experience and skills without the constraints of traditional full-time employment.

Flexible work environments and savings strategies will need to support the evolving approach to retirement in the future. Many employers will need to consider adapting to flexible working hours, remote work options and phased retirement plans that align with the changing needs of their workforce. Policies must also adapt to allow individuals who wish or need to remain employed longer to do so comfortably. For example, extending the age limits for pension contributions and providing incentives for lifelong learning can help older workers remain competitive in the job market.

Boost retirement savings

Additionally, a concerted effort must be made to help people save more effectively for retirement. Financial education and planning services should be made more accessible to ensure individuals can make informed decisions about their retirement savings.
Millions of adults are currently off track with their savings and might have to delay retirement plans as a result. Addressing this issue will require strategic policy changes to boost retirement savings and provide adequate support for a flexible workforce. For example, increasing employer contributions to workplace pensions and offering tax advantages for personal savings plans could incentivise higher savings rates.

Source data:
[1] Phoenix Insights research conducted by Message House, carried out in January 2024 among 1,502 UK adults. Weighted to be nationally representative.

 

THIS ARTICLE DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

Book your FREE, no obligation discussion today. Schedule Appointment

Sign Up to our mailing list - Receive regular news, tips and financial commentary from the Gemini Team.

Latest News

  • If you are in your 40s or 50s, you have likely contributed to a pension for quite some time. Over the years, you may have accumulated multiple employer workplace pensions. However, when did you last thoroughly examine your pension and retirement strategy? Having a documented retirement plan can help you feel more prepared for this stage of your life, ensuring you have a sufficient income when you stop working. Here, we explore several factors to consider when reviewing your savings. If you don’t yet have a plan, in this article, we consider a helpful starting point. [...]

  • Increasing longevity and evolving demographics have left many middle-aged individuals juggling careers with caring for both ageing parents and children. This issue is particularly acute for ambitious professionals who prioritised establishing their careers before starting a family in their thirties or forties. [...]

  • With 2.81 million people in the UK now away from work due to long-term sickness, ensuring employers offer comprehensive health benefits is becoming increasingly critical. This approach is essential for preventing employees from becoming too ill to work, as well as for attracting and retaining staff in a competitive job market. By providing the right health coverage, companies can support their workforce’s wellbeing, leading to higher productivity and job satisfaction. [...]

  • As we age or accumulate more wealth, protecting and preserving our assets for future generations becomes increasingly essential. This process, known as Inheritance Tax (IHT) planning, estate planning or intergenerational wealth planning, involves strategically managing your estate to minimise tax liabilities and ensure that your wealth is passed down to your loved ones in the most tax-efficient manner possible. [...]

  • Balancing the many responsibilities of motherhood can be overwhelming, often pushing long-term financial planning onto the back burner. However, effective financial planning is essential for everyone, and as a mother, you face unique challenges that require extra attention. Here are some key financial planning steps to help you take control and secure your family’s future. [...]

  • On 30 October, Chancellor of the Exchequer Rachel Reeves will deliver the Autumn Budget Statement 2024, accompanied by a comprehensive fiscal statement from the Office for Budget Responsibility (OBR). This significant event comes as the new government, elected to boost economic stability and growth, takes its first important step in addressing the nation’s financial health. [...]

  • Diversifying your portfolio places you in an advantageous position to seize opportunities across various investments as they emerge. This strategy usually results in a smoother investment journey. But how? The answer lies in the balancing act that diversification encourages. Investments that appreciate in value can offset those that are underperforming. [...]

  • Over recent years, our comprehension of the climate crisis has significantly transformed. Countries and organisations are becoming increasingly ambitious with their net zero targets, while many individuals are making lifestyle alterations to reduce their household carbon emissions. However, some remain oblivious that pensions represent one of our most potent tools for making substantial strides towards net zero. [...]

  • Early retirement typically signifies reaching financial autonomy before the statutory pension age, usually in the mid-60s. In the United Kingdom, retirees can begin drawing their State Pension at age 66. However, this retirement benchmark is set to increase to age 67 by 6 April 2028. [...]

  • The latest research reveals a significant disparity in perceptions regarding retirement experiences of the past and potential future scenarios. Over the past 50 years, a ‘hard stop’ or ‘transitional’ retirement has been the predominant way people have transitioned into retirement. A ‘hard stop’ refers to an abrupt end to working life, while a ‘transitional’ retirement involves gradually reducing working hours. [...]

  • More than three-quarters (78%) of retirees have already dipped into their pension pots by the time they retire, according to recent data[1]. Of these, more than half (52%) withdraw funds five years before their Selected Retirement Age (SRA), with 21% opting to start taking out funds nine to ten years before they retire. [...]

  • Around 7.3 million UK adults, or one in seven, encountered an attempted pension scam in the past year. Alarmingly, 14% were targeted through unsolicited calls, texts or emails, according to recent research, illustrating the aggressive tactics employed by scammers. This concerning trend has prompted a closer examination of the vulnerabilities within the pension system, especially as scammers become increasingly sophisticated in their approaches. [...]

Gemini Wealth Management Ltd is Authorised and regulated by The Financial Conduct Authority Registered in England & Wales No. 5919877 Registered Office: Gemini House, 71 Park Road, Sutton Coldfield, West Midlands B73 6BT The Financial Conduct Authority does not regulate tax and trust advice, will writing and some forms of buy to let mortgages. The guidance and/or advice contained in this website is subject to regulatory regime and is therefore restricted to those based in the UK.

Website by Mellow Marsh Software
© Gemini Wealth Management Ltd
Important Documents | Cookie Policy