Working in Retirement
Research conducted recently analysing the income data for pensioners found increasing numbers of individuals aged over 65 are continuing in work beyond their official retirement date. Figures report that the number of pensioners doing this is approximately 13%, a rise from 8% within the last decade. That figure may appear small, nevertheless it implies 1.1 million individuals are increasing their income throughout retirement. The average income each week is £296, which results in £15,400 additional income each year.
Opting to continue in employment may be due to a need for more income, however remaining employed has been proven to provide many mental and physical benefits, along with assisting to maintain social activity and providing a feeling of purpose, which many feel they lose following stopping work.
For many, the choice to continue in employment of some type is just because of a passion for working. If you’ve enjoyed a long and rewarding career in something you enjoy, retirement may come as a shock. Carrying on in some way, by lessening your hours or reducing responsibilities can relieve these feelings, enabling you to ease towards a new lifestyle with a pace you’re contented with. You may also have the opportunity to try a new challenge that wasn’t feasible before reaching retirement. Continuing working in a differing role or a different industry altogether can provide the chance to pursue interests you’ve harboured during your working life together with the additional bonus of getting paid for it.
If you’re approaching retirement or already are retired and you’re considering continuing work, it’s worth understanding the way it could affect your pension, depending upon how you decide to go about it. All state pensions and the majority private pensions may be postponed, the advantage of this is that your pension is able to continue to grow which, this will provide you with extra money to enjoy once you do cease working completely.
Also you can elect to begin taking your pension whilst still working, but whatever you take will be counted as income, so all income from earnings as well as your pension above your individual allowance is going to be taxed. You won’t pay NI contributions as soon as you’re above state retirement age, however, which puts a bit more cash back in your pocket.