01 Nov 2023

Working after retirement

What to consider if you’re thinking about working after retirement age

The ideal retirement’s all about freedom. For years, you’ve been working hard and saving what you can. Hopefully you’ve built up a good, solid pension pot. You’ve got your State Pension to look forward to – or perhaps you’re already drawing it. You might even have other investments that’ll top up your income.

The upshot? You’re free to live your life on your own terms.

You might be thinking about how to retire early. But many of us are choosing to stay in work of one kind or another. And that’s something people often start planning in their 50s, because that’s when your retirement starts to get very close indeed. Others are ‘unretiring’, returning to work to help cover the rising bills and living costs.

While working into your later years may have its benefits, it’s good to understand the advantages and disadvantages of working after retirement in the UK. In this article, we’re going to look at why working after retirement can be great choice, potential drawbacks, and your options.

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What will your retirement look like?

Understanding how much your retirement income could be can help you plan the best way to access your money. Our Retirement Income Calculator can help.

Advantages and disadvantages of working in retirement

Working after retirement age isn’t for everyone. If you’ve spent the last 40 years or so working, you may just want to relax and enjoy your free time. There are advantages to working after retirement though. You’ll still have an income – or boost your retirement income – and still pay into your pension, with the opportunity to maximise your employer’s contributions. However, there are disadvantages of working after retirement age. You may find your work stressful, and no longer want to be committed to working long or unsociable hours. The freedom that retirement can offer is a tempting opportunity for many.

Going back to work after retirement

Making the choice to leave employment after a long career can be difficult, and many people choose to return to work after retirement. But it can also be an opportunity to take a new career path or to try something new. 

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How many hours can I work after retirement in the UK?

There’s no restriction on the amount of hours you can work after retirement, and you can continue to work past your retirement age. So you can enjoy the flexibility retirement offers, whether that’s returning to work, continuing to work full-time, going part-time, or exploring unpaid work.

Continue working full-time

If you enjoy your role and don’t want to stop working full-time, then you can continue working after retirement age. This may impact your ability to access your pensions, so it’s worth checking with your pension provider. If you do access your pensions, this may push you into a higher income tax band, which might mean you’ll have to pay more tax on your earnings. Regardless, if you work past State Pension age, you won’t pay any National Insurance on the money you earn.

You can claim the State Pension even if you’re working full-time. But many choose to defer it. The longer you delay taking the State Pension, the larger weekly payments you’ll get when do. You can find out more about deferring your State Pension on gov.uk.

Go part-time

Out of 5.45 million people working part-time in the UK today, 3.2 million are over 50, so if you’re considering reducing your hours at work, you’re not alone. It can be a great way to ease yourself into retirement while continuing to earn a living.

Enjoy a balance of paid and unpaid work

Returning to work after retirement can be a great way to stay connected while earning an income. But many find that retirement offers them a chance to volunteer. Helping a cause or charity in retirement can bring with it a social aspect, while also using skills and experience gained during your career. Finding a balance between paid and unpaid work can bring with it the ability to earn money, and give back to your community.

Can I work after a medical retirement?

If you have a health problem that means you can no longer do your job, you may be able to retire early. You can read more about this in our article on early medical retirement. If your circumstances change, you can return to work after medical retirement. However, if you have started to draw your pension you won’t be able to return to the same role, unless you work reduced hours, and returning to work may impact any means-tested benefits you receive.

What’s next?

When approaching retirement age, it’s always worth planning for what’s ahead. While not everyone is able to prepare, it may be worth thinking about what your ideal retirement looks like. For some, a slower transition into retirement may work, while others prefer a clean break. And sometimes retirement isn’t what you expect it to look like.

The Retirement Living Standards website is a good place to start when it comes to planning your own retirement. It’ll help you think about when you’d like to retire and work out what sort of income you’ll need to fund it.

Our retirement income calculator is a really useful tool, that can help you find out how much you’ll have when you do decide to retire. If you’re over 50, you can book an appointment with Pension Wise, a free service from MoneyHelper, who can help you understand how to plan your retirement income.

If you’re considering the advantages and disadvantages of working after retirement, you might want to read our article, ‘What age can I retire?’, which goes into more detail about the pros and cons of staying in work or delaying retirement.

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