Reducing Working Hours, But Not Retiring
The norms of society are being broken by the “superboomers” generation, with overnight retirement becoming less attractive and gradual retirement a much more common option. We look at this trend of reducing working hours, rather than retiring altogether in this blog post.
It’s no secret that us Brits are living and staying fit and healthy for longer, hence the reason for recently announced increases to the UK state pension age (SPA).
The SPA will rise to 67 by 2028, reflecting an increasing life expectancy and will continue to rise thereafter linked to life expectancy. However, with life expectancy rising from 78 in 2000 to 82 in 2010, an increase in the age we can expect to live to of four years in the space a decade suggests that life expectancy is rising far quicker than the state pension age.
The result? We are becoming a lot fitter and healthier and can probably cope with working longer.
It’s becoming a lot more common, therefore, for older workers to work past the SPA as, unlike previous generations, they feel they still have a few more years left in the tank.
There are several reasons why we are able to work longer. Better healthcare is keeping us fitter. Awareness of the dangers of smoking and unhealthy foods is keeping us healthier. And the fact that more of us spend all of our careers in an office rather than more physically demanding work is seeing our bodies wear out much less quickly. All in all, we are as healthy a workforce as we have ever been!
So while it would be nice to reach our SPA and put our feet up in front of Loose Women each day, many older workers know that they could carry on working at least to some extent and realise that there are huge perks to doing so.
Even if you decide to stay on working part-time after reaching SPA, you can still claim your weekly state pension allowance. Your total income could be subject to tax, but you’ll have the opportunity to continue brining in a good income and have that supplemented by your state pension.
Even more rewarding could be the option of deferring your state pension until later. If you put your state pension off for at least five weeks you could earn a higher weekly amount later in life, while postponing your state pension for at least a year offers the option of receiving a lump sum and, subsequently, your normal weekly state pension.
So are many older workers taking this option?
Yes, they are. Employers are even realising the desire among many older workers to reduce their hours without properly retiring and more and more employers are starting to offer flexible retirement options to their employees and to make these well-known to all staff.
Employers enjoy a benefit from this scenario as they are able to retain knowledgeable and experienced staff, while freeing up some budget to bring in new employees and build for the future at the same time.
There are two main ways in which older workers are going about reducing their hours, with the most common one being ‘Wind Down’ which sees the workers simply reducing their hours. Also available to most older workers is the chance to ‘Step Down’ where older members of staff volunteer for a demotion to reduce the number of responsibilities they have while remaining a part of the company.
The idea of reducing hours rather than retire straight away is increasing in popularity. With life expectancy going up and up, this trend looks set to continue. 70-year-old part-timers should be a very real part of the UK’s future.
Photo credit goes to Kayla Kandzorra