The majority of people working in the UK would prefer to take a flexible approach to retirement, rather than stopping work at state pension age.
Research by Aegon found that 61% of UK workers expect to make some kind of transition to retirement, whether that’s working past their state pension age or switching to part-time work.
Most respondents see continuing to work longer as a way to keep mentally and physically active (62%), while others plan to do so because they enjoy their work (39%).
Many people have been able to supplement this transition into retirement by making use of pension freedoms.
These allow anyone aged 55 or over to withdraw from their pension pot as they choose, with the first 25% tax-free and the rest taxed at their income tax rate.
HMRC statistics have revealed that since the freedoms were introduced in April 2015, 3.7 million withdrawals have been made from pension pots, amounting to a total of £17.45 billion.
The number of people making these withdrawals has increased over time, from 84,000 in Q2 2015 to 264,000 in Q2 2018.
Steven Cameron, pensions director at Aegon, said:
“Many people are choosing to keep working and earning, perhaps by cutting back their hours gradually, even once they’ve started taking their pension.
“The government’s introduction of pension freedoms and banning employers from having a fixed retirement age has made it easier for more people to choose to work past traditional retirement ages.”
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