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When Retirement is not Retirement


A significant number of you may well have noticed that you have friends and family who have masterminded a lifestyle change once they have reached age 55. You may be one of them. Either way, significant changes in society and the make-up of the population, have seen an end to the days when people simply stopped working and retired at 60 or 65. These days people can ‘retire’ from age 55, and, thanks to pension freedom can do much more with theor pensions savings than just take out an annuity. However, many don’t actually retire or retire completely. Hence the title of this article.

Some Changes Affecting Retirement

There are a number of dilemmas facing the Government in the broad area of pensions and related areas. These include:

  • Dealing with a rapid rise in the number of those aged over 80,
  • A decrease in the number of workers under the age of 40,
  • Anti-age discrimination legislation,
  • Flexible working provisions,
  • An increase in State pension age, and
  • The complications of people living to older ages but not enjoying the best of health.

In addition, it is interesting to note that there are apparently nearly 10 million UK workers age 50 and over, which represents almost a third of the workforce. More than 1 million of these are age 65 and over.  This is a relatively recent phenomenon, in the sense that retirement is now seen as being a significant length of time as compared to the working life of an individual.

Over the past few years, Barclays Wealth Research has identified that increasing numbers of high net worth investors (over 60% of those surveyed) have no plans to retire – causing it to coin the term “never retirees”.  Further recent research finds that just 12% of workers age 65-74 say they work because they “need to earn money”. By contrast, more than one third say it is because they “enjoy the work” and a further one in five because it gives them “a sense of purpose”.

Pension Freedom Arrived in 2015

Against the background of these changes, there are no surprises then that a flexible pensions regime was created in 2015 allowing members of pension schemes over the age of 55 to flexibly access their pension arrangements.

We at PML are – in the main – in agreement with this innovation. However, there are some powerful caveats to address and although retirement funds are not strictly speaking being used by retired people, they are essentially just that, retirement funds.  There must be some degree of caution, particularly if the member does not have any obvious other wealth to live off in a usually greatly extended later life.

We frequently receive the counter argument from a member in that they will downsize when funds are required and move into a smaller property.  In theory, this is workable but in practice it may not be.

Consider this. You will not be the only one thinking of doing this.  The market is starting to be flooded with large family sized properties, which actually can’t be bought by young families because of the exponential increase in property prices over the last 20 years.  In short, you may well be stuck with an illiquid asset which you may well desperately wish to convert to cash.

Pension Planning is now about a broad mix of assets and products.

Our belief, therefore, is that the basis behind pension planning, now we have pension freedom, is to have a broad mix of assets and products which you can call upon in retirement.  These could range from residential property, pension funds and ISAs. However, with the healthy tax breaks, pension schemes currently enjoy, if at all possible and if affordable, a pension scheme should be the first port of call in saving for retirement.

For help and advice with pensions, or call us on 0121 693 0690.


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