How is retirement changing?
We’re not just living longer, we’re also expected to work for longer. But will the traditional notion of retirement – putting your feet up at a beach in Spain, attending to your allotment and making painfully bad style choices, all the while receiving a steady income from the state – disappear altogether? Here we look at the current grounds for getting a State Pension and the changing nature of retirement in the future.
Retirement at the moment
The current government recently implemented a new State Pension, and this changed the terms a little. You’ll be able to claim the new State Pension if you’re:
- A man born on or after 6 April 1951
- A woman born on or after 6 April 1953
If you reached State Pension age before 6 April 2016, you’ll get the State Pension under the old rules instead.
To get the new State Pension you’ll need to have paid in at least 10 years’ worth of National Insurance contributions. This doesn’t have to mean 10 years in a row. Instead, it means for 10 years at least one or more of the following applied to you:
- you were working and paid National Insurance contributions
- you were getting National Insurance credits for example if you were unemployed, ill or a parent or carer
- you were paying voluntary National Insurance contributions
The full new State Pension is £164.35 per week, but the actual amount you get depends on your National Insurance record.
Is the current retirement model what we all want?
A report by the DWP in 2015, conducted by YouGov, outlined that nearly half of those over 50 wanted to keep working between the age of 65 and 70. Only 17% said that working full time and then stopping work altogether would be the best way for them to retire.
Retirement perks don’t suit all modern retirees – the abundance of time can bring anxiety rather than a relaxing ease into older age.
At 65 a man can expect to get another 25 years under his belt and a woman another 27 years, and many people at this age start to wonder how they should fill up their long afternoons. If you’re used to spending a lot of time on your feet as well as exercising your brain during a day job, retirement can start to seem tedious.
Retirement isn’t going to be so clear-cut
The last time Parliament tackled the changing face of retirement was in 2013, with the ‘Ready for Ageing?’ report. The report notes that we need to end “cliff-edge” retirement, where those who reach retirement age are expected to drop everything and take off to their seaside holiday home.
People should be allowed to keep working if they want to, and it’s increasingly the case that they need to. When given the option, over 1 in 4 said they would be interested in taking a few months off and then returning to work as an alternative to retirement.
It’s also clear that flexible and part-time working, as well as a chance to learn new skills, will need to take the place of a traditional retirement model. People may want to work longer, but shift the pace while still making the most of their skills.
How to retire successfully
- Rethink your expectations on retirement. If you’ve been not just living for the weekend but retirement too, it’s possible you’ll need to scale back your retirement plans. But if you’ve got a good track record of saving, or you’ve not got your sights set on a retirement yacht, then you might do just fine.
- Don’t let your passions waste away just because you’ve reached the pinnacle State Pension age. The jargon word is ‘re-skilling’, but we prefer the phrase ‘learning exciting new hobbies’. According to the YouGov poll, nearly half of non-retired over 50s said they were interested in attending a training course to learn new or update existing skills.
- You don’t have to stop working when you reach State Pension age. You can also request flexible working hours – this means you can ask an employer for part time work, staggered hours and phased retirement by making a statutory request. You can find information on that here.
- Get planning: not just financially (which we’ve got a lot of in our Money Issues page) but thinking about whether you’re going to move, how to secure a support network and what you want to achieve by – that’s right – your 90th birthday.
Find out more
Visit our Money Issues page
And our article on what apps to download to help you out in older age