Working past retirement age
As you reach retirement age, it’s worth considering what you want your retirement to look like. It can be a gradual process and often could suit you better than stopping work altogether. What matters most is you. Being prepared for retirement and shaping it intosomething that suits you is key.
No national insurance to pay
An important and often overlooked fact to consider is when you stop paying National Insurance (typically at State Pension age for employees, and on the 6 April following State Pension age if you are self-employed). This means that if you continue to work, you’ll take home a bit more each month which you’re free to spend or save as you choose.
Do what you enjoy
One of the most important reasons to keep working past your retirement age, is that you enjoy your work and want to keep doing it. There is nothing forcing you to stop working when you reach retirement age and though many people choose this time to step back from work, if you enjoy what you do then there’s no reason to stop.
The additional income you receive from your pension may enable you to reduce your hours or work more flexibly if you wish. It could be that you have a specific project you’d like to see through before stepping back, or it might simply be that you have no immediate intention to retire and would like to keep working for now.
Boosting your income
Not everyone can afford to give up work when they reach retirement age and a common reason to keep working in retirement is to boost your income beyond what your pension alone would provide. It might be that this involves working full time or perhaps taking on part-time work to top up your finances while enjoying more time to do what you want.
Enjoy a bigger pension further down the line?
Postponing your pension and continuing to contribute can help increase your retirement income down the line. While delaying benefits may improve your eventual position, a higher outcome is not guaranteed. Your final pot will ultimately depend on investment performance, future pension rules, and your individual circumstance.
Retire gradually
Work can bring purpose and fulfilment, not to mention social benefits. Retirement often brings lifestyle changes and some people will miss the regular interaction with their colleagues, or the sense of structure that work brings to their week.
Many people take up part-time work, or even volunteering, in retirement. This way the transition into retirement can be gradual and flexible.
Levels and bases of, and reliefs from, taxation are subject to change and their value will depend upon personal circumstances. Taxation and pension legislation may change in the future.
The value of investments and pensions and the income from them can fall as well as rise. You may not get back the amount originally invested.
Pension savings are at risk of being eroded by inflation.