Getting the most out of semi-retirement

More people than ever before in the UK are making the decision to retire early. Since the Covid-19 pandemic, there has been a significant uptick in the number of 50 to 64 year olds choosing to retire – a trend which has been noted by the House of Lords, prompting a report into the subsequent effect of shortages in the labour market.   

Although state pensions cannot be taken until the age of 66 (rising to 68 depending on a person’s date of birth), private pensions can be drawn from the age of 55. However, many people choose to ‘unretire’ – to retire from their career, but not to stop working altogether. Sometimes this is a purely financially driven decision; sometimes it’s because the person wants to carry on working in some capacity for other reasons. But whatever the motivating factor, semi-retirement is a growing trend amongst the older working population – and one that requires careful thought and consideration.  

A growing trend 

According to research done by Aviva, more than two-fifths of 55-64 year olds are planning semi-retirement before they reach state pension age. With those who have semi-retired painting a rosy picture of reducing their working hours, with 91% of them reporting themselves as ‘much happier’, it’s not surprising that younger people see semi-retirement as an enticing option when their time comes.  Aviva’s research reports that 59% of 18-34 year olds and 61% of 35-44 year olds state that they hope to semi-retire. Given life expectancy is rising and our working lives are longer than ever, younger people too are thinking more flexibly about working in their later lives.   

What does semi-retirement look like?   

So what does semi-retirement look like? In some cases, it’s drawing a private pension from the career role and then finding alternative work. Others may choose to not touch their private pension yet, but still scale down their work commitments, going part time, or moving to a less stressful role. There may also be the option of a flexible ‘retire and return’ or consultancy at your current organisation.   

But it’s how semi-retirement feels that’s often the key decider for people in choosing it, rather than full retirement. Financial benefits aside, semi-retirement offers the chance to transition more gently from full-time working to full retirement, delivering more time off, improving work/life balance, reducing the commute, stress and responsibility of your previous role.   

Some choose to work to fund their leisure travel and extended holidays – perhaps working during the winter months and then taking the summer off. Adopting a portfolio career approach to semi-retirement has many advantages in terms of maintaining flexibility – as well as the relative financial advantage compared to retiring fully.   

What’s the catch? 

There are financial aspects to consider, of course, in doing this. Semi-retirement needs to be a financial balancing act, in order to avoid penalties incurred by potentially increasing liability for income tax and reducing your annual tax allowance. Some MPs have called for pension tax rules to be lifted, to encourage more people in their 50s and 60s back into work. But one of the biggest challenges in semi-retirement is the lack of suitable roles.  

Despite there being a labour shortage and a willing and growing pool of experienced talent keen to take on roles in semi-retirement, the market has not responded accordingly.  

Employers do not yet provide enough part-time or job share roles which play to the talents, strengths and experience of the older generation. There is a gap that has not yet been sufficiently bridged by the market between what semi-retired people can offer organisations and what they need from their roles in order to make semi-retirement work for them. It’s potentially a great  opportunity for employers  to make their offer more flexible to tap into what is a wonderful, growing resource especially when recruitment is so difficult right now.  

Finding the right role for semi-retirement 

There are some avenues to pursue if you’re looking for suitable roles for semi-retirement: 

• Talk to your current organisation about options to cut your hours, change roles, move into a project role, consultancy arrangement or mentoring position – they may be able to help craft a role that works for both parties.  

• Check out websites like workingwise.co.uk or restless.co.uk. 
• Search for job shares or part-time roles. 
• Think about running your own business – this way you are in control of your working hours 
• Look at associate work with other consultancies/collaborating opportunities with other freelancers – this might mean setting up as self-employed. 
• Consider contracting taking on assignments for set projects – again this will mean self-employment. 

• Apply for full time roles if necessary and then ask subsequently if they will consider part time or a more flexible working contract. 
• Research organisations that allow sabbaticals or extended periods of leave.   
• Look at seasonal work – whether this is Christmas jobs to give you income over the winter to be able to take the summer off or doing seasonal ad hoc work like invigilator for exams in schools, colleges, universities in May or June, helping at elections – there are a wide variety of temporary seasonal roles to explore.  
• Look for roles that combine earning a small income with your passions eg. being a chalet host for the skiing season or a tour guide for a walking holiday. 
• Consider volunteering in an area that interests you – many organisations use volunteers to run trips or programmes so you could get involved, get your expensees covereed and help run events for others that you also enjoy!   Have a look at, where you can search by geographic location as well as type of charity and skills or check out organisations like Raleigh International who have projects abroad where you can both volunteer and travel.  

If you are thinking about retirement this hopefully this gives you some options to explore. If you need help in getting the most out of semi-retirement, email me to book a first free session.    

Featured image courtesy of Unsplash – Towfiqu Barbhuiya