Two-thirds of people due to retire in 2022 intend to keep working in some form to help combat the cost of living crisis or simply to keep busy, according to research from abrdn.

The provider said part-time work or entering the gig economy were potential earners for people who intend to retire this year.

It said two thirds (66%) of people retiring in 2022 planned to remain employed in some form compared to 56% in 2021 and 34% in 2020. The data comes from abrdn's Class of 2022 report which surveyed 2,000 people across the country to determine how they will spend their time and money in retirement.

Flexible friend

The research found a quarter (24%) of the Class of 2022 will go part-time with either the same job or a new one, one in six (15%) will continue to work for their own business, and just over one in ten (12%) plan to become entrepreneurs and start their own business.

The main reasons cited for ‘flexi-retirement' include needing the income (31%) and wanting to keep busy (32%).

Colin Dyer, client director at abrdn Financial Planning, said: "Gone are the days when everyone had a set date or a set age from which they'll never work again. The emerging trend for ‘flexi-retirement' for financial reasons, or just to keep busy, is here to stay. The Class of 2022 are challenging the norms and doing what works for them.

"Hearing why retirees are choosing to work really underlines the importance of taking a holistic approach to retirement and how sensitive plans can be to external issues, such as the surge in the cost of living or the pandemic."

Of those who planned to reduce their hours or get a part-time job in retirement, about a third had taken financial advice about the step and only a quarter were aware of the potential tax implications around dipping into their pension while still working and still saving more into their pension.

"Working in retirement can have wider financial implications, all of which need to be planned for," added Dyer. "This can seem complicated, but that's where preparation and speaking to an expert can help."

Data on the Class of 2021 showed 56% continued to work and 41% sought financial advice on the issues. Some 32% of 2021's retirees said they had either joined or planned to join firms such as Deliveroo and Uber.

The research found that just a quarter (25%) of this year's retirees feel very confident they have saved enough to fund their retirement - compared to nearly a third (30%) of the Class of 2021.

The rising cost of living is likely to be a key factor in this drop in confidence, the provider said, with more than a quarter (27%) of the Class of 2022 saying they do not know how to mitigate the impact of rising inflation on their retirement income.