Financial pressures forcing over-50s back to work

New data shows almost 3 million retirees have returned to the workplace

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Many of us over the age of 50 have been feeling the pinch in recent years as a result of rising prices in the UK. Some however, have been left with no choice but to return to the workforce. 

New data shows that a staggering 2.8 million over-50s have resumed employment, despite only 3% ever planning or considering that as an option before.

Insufficient retirement income

The research from Legal and General shows that over a third (37%) of people who returned to work have done so because they require a greater income in their retirement thanks to rising living costs.

Legal and General Home Finance CEO and Retail Retirement managing director, Lorna Shah,  points out that despite this factor “driving people back to work to top up their income”, they are tending not to return to full-time roles. Instead, they are opting for part-time or seasonal roles to boost their later-life finances.

Mental and emotional wellbeing

While financial necessity is a major factor, it isn’t the only reason why some over-50s are returning to work. 

Retirement can sometimes lead to feelings of isolation and a loss of identity, especially for those who were deeply involved in their careers. Returning to work offers social interaction, intellectual stimulation and a structured routine, contributing positively to our overall well-being.

According to Legal and General’s research, 62% of returnees want to stay mentally engaged, and 32% aim to gain a sense of purpose through work.

That said, re-entering the workforce can present challenges. The transition can be physically demanding, especially for those of us who have been out of the workforce for a while. Legal and General’s research indicates that 24% of returnees experience tiredness, 22% miss their free time, and 17% struggle with changes in work culture.

Alternatives to returning to work in retirement

Returning to work isn’t the only option open to retirees worried about financial pressures. Here are some alternatives that may provide the necessary funds without forcing a return to work.

Downsizing

Downsizing involves moving to a smaller, more affordable home, or moving to an area where property is cheaper. This can free up some equity from your home and reduce your living expenses, such as mortgage payments, maintenance costs and utility bills. 

The cash you can raise from downsizing can provide a safety net to support you in retirement and top up your day-to-day finances. It can also simplify your lifestyle, with less space to maintain and lower overall costs.

Equity release

Equity release allows homeowners aged 55 and over to unlock some of their home’s value while continuing to live there, without any mandatory monthly repayments to make. There are drawbacks that you’ll need to consider, like how a plan will reduce the value of your estate, so speaking to a specialist first is essential. 

(To find out more, read more about the different types of equity release or call us on 0808 178 3055 and we’ll arrange a free, no-obligation appointment with one of our selected advisers.)

Asking family members for help

Discussing financial support with family members might help alleviate some of the financial pressures in retirement. From borrowing a cash lump sum to shared living arrangements, there are different ways they may be able to provide support for you in your later years.

This conversation should be approached with openness on both sides, ensuring that expectations and boundaries are clearly communicated to prevent issues later down the line.

Check you are receiving your full benefits entitlement

If you are struggling to make ends meet in retirement it is important you check to make sure you are receiving support you are eligible for, such as Pension Credit. Use the GOV.UK online benefits checker to check your entitlements and make sure you aren’t missing out.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn