Spiraling inflation, volatile financial markets and the rising cost of living are leading to the ‘great retirement’, with research suggesting that retirees are returning to the workplace.
There are now more people aged 50 and over working or looking for work than shortly before the pandemic, according to data from the National Statistics Office (ONS).
Their analysis shows that last year there was an increase in economic activity (people working or looking for work) of 116,000 among the over 50s.
More than half of the total increase is among men over 65 – whose economic activity levels rose by 66,000, or 8.5%, in one year – with 37,000, or a 6.8%, plus women over 65 or looking for work.
Experts say in-depth research indicates the increase is due to former retirees returning to work, rather than people working longer. “People who thought they could retire comfortably during the pandemic should retire and find work again to earn extra income and top up their pensions while they still can,” said Stuart Lewis, chief executive of Rest Less, a community digital of the over 50s.
“A growing number of retirees are feeling poorer than they’ve ever felt before, with consumer confidence at an all-time low and spending power eroding on a monthly basis,” he added. “All of this is driving the non-retirement trend.”
Volatile financial markets were creating significant fear and uncertainty in people’s perceptions of their future retirement income, Lewis said. The one-time suspension of the triple freeze on the state pension last April means the state pension rose by just 3.1%, while inflation rose 9.4% in June. “It’s no surprise that people are looking for ways to earn extra income,” he added.
Caroline Abrahams, Age UK’s director of charities, said it was no surprise that a significant number of retirees were “jumping back into work in an effort to shore up their finances against the storm”.
“Judging by what we are told at Age UK, many older people are looking towards winter with extreme trepidation,” he said. “With inflation high and rising, we can see why – the prospect of struggling to keep the heating on is truly terrifying.
“Carefully designed retirement plans, which seemed financially sustainable a year ago, are now in tatters and this is a huge disappointment if you’ve been hoping for rest and a chance to enjoy yourself after many years of work.”
Ros Altmann, the former pensions minister and Conservative peer, said the government was wrong to remove promised pension protections. “The fear of inflation has caused a lot of anxiety and has caused some to return to work even if their health is not up to scratch,” he said.
Cora Adcock, a part-time music teacher who retired at the age of 64, had to go back to work at the age of 69 because her pension did not cover her increased living expenses.
Cora Adcock. Photography: brochure
“I couldn’t financially manage my state and teachers’ pensions, especially because I missed a few years of contributions because I took time off to look after my children when I was young,” she said.
Adcock found work playing the organ for up to 13 funerals a day at a local crematorium, but lost his job at the age of 71. Partially sighted, Adcock is still trying to find work. “I’m looking for work that I can’t physically do because the bills are a concern,” she said. “I have already cut everything I could. I don’t even use the oven.”
Dr James Derounian, from Gloucestershire, recently returned to his teaching job two years after retiring aged 62. “I had planned to retire, but life had other ideas,” he said. “The cost of living curtailed all my plans.”
Qualitative data from the ONS supports the idea that the figures reflect those coming out of retirement, rather than continuing to look for work after the age of 65: 12,000 people aged 50-70 who were not currently looking were asked work, whether they would consider working again in the future. One in three of those aged 50 to 64 and one in 10 of those aged 65 and over said they would.
The trend is also supported by a recent survey of retired Rest Less members, 32% of whom said they would consider returning to work or were already returning to work. Almost 70% of them said they were not retiring, purely or partially, for financial reasons.