The benefits of part-time work in retirement

As of June 2022, the number of people aged 65 years and over in employment hit record levels, with almost 1.5 million working part-time, an average of 21.7 hours per week.

With the cost of living crisis, this trend is not likely to reverse anytime soon. 

When thinking about retirement, it's easy to be swayed by thoughts of winter sun, family time, and days in the garden. However, many people find that working part-time is a necessity.

That said, you should make your own opinion and decision based on the facts from the information we provided.

Retirement income and tax

With no set retirement age, you can continue working part-time for as long as you like. 

You can access most personal pensions from the age of 55. 

Once you reach state pension age, you can withdraw your new state pension whether you retire.

Until you reach state pension age, you will still be required to pay National Insurance contributions to your pension income. 

All income above your allowance is taxable. So any additional income from a part-time job will be used, exposing you to more tax on your pension.

It's good for physical and mental health.

A recent study of 83,000 older adults suggests that individuals who continue working past age 65 are more than 3 times more likely to report good health and less likely to have serious health issues.

This finding could be attributed to the social interaction, mental stimulation, and structure that work provides. 

Advantages of working part-time in retirement

In this day and age, people find it better to reduce their hours and retire gradually and slowly. Working part-time lets you:

• Staying engaged in the workforce provides an opportunity for social interaction
• It gives you a sense of purpose. After all, there is only so much golf you can play
• It can offer the chance to do something completely different
• It can provide you with the opportunity to set up a consultancy, based on your experience, working selective hours

Part-time work can reduce the stress on your savings and help them last longer

Some part-time jobs offer health insurance benefits, which can be particularly valuable in retirement

Need help with your retirement planning?

Planning your income is critical to retirement planning, especially if you plan to continue working part-time. Here at Regulated Advice, we have a range of financial advisors specialising in retirement planning. 

Let Regulated Advice match you with a financial advisor for expert advice.