Older workers delaying retirement to release cash from their savings
One in four older workers could delay retirement after dipping into their pension pot, new research from Zurich shows.
Working beyond planned retirement date
Just over a quarter (26%) of over-55s in employment said they would be likely to work beyond their planned retirement date after using the pension freedoms to release cash from their savings.
Over a third (35%) of those who said they would put their retirement on hold claimed they would be likely to work for a further five or more years, while a quarter (23%) would prolong their careers by two years.
Far-reaching effect on retirement trends
The pension freedoms could have a far-reaching effect on retirement trends. As many as a quarter of over-55s could delay retirement – some by more than five years – after unlocking cash from their pension. Increasingly, more people may use the reforms to boost their spending power. The freedoms give older employees a chance to access their pension by spending an amount of their savings and staying in work longer to top them up again.
In most cases, individuals who access their pensions will see a reduction in their annual allowance. This means the amount they can save into a pension tax-free will fall from £40,000 to £10,000.
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.
A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN. YOUR EVENTUAL INCOME MAY DEPEND UPON THE SIZE OF THE FUND AT RETIREMENT, FUTURE INTEREST RATES AND TAX LEGISLATION.