What’s driving retirees back to the workplace?

Chancellor of the Exchequer Jeremy Hunt has eagerly called for older people who’ve recently retired to come back to the workforce and boost the economy.

Speaking recently, he sought to tap into their patriotic spirit by saying “Britain needs you”, before adding that the government “will look at the conditions necessary to make work worth your while”.

But if you’ve retired, will that be enough to tempt you back? We’ve asked Will Dowd, Paraplanner, to explain in more detail what exactly is bringing retirees back to the workplace, and if you’re thinking of going back to work, what benefits are in it for you.

Let’s hear from Will…

If I’m being honest, even the most patriotic person who’s recently retired could justifiably argue that they’ve already spent years contributing to the economy, paying into the system and doing their bit for society.

There could be a few things that could get those who feel like they’ve paid their dues back into the workforce. The ongoing cost of living crisis is definitely a strong contender, as well as the realisation that their pension income isn’t going to go as far as they hoped.

The Institute for Fiscal Studies (IFS) has recently noted a very slight uptick in the number of 50- to 64-year-olds going back to work, with the inactivity rate among this age group falling from 27.7 per cent in May to July 2022 to 27.1 per cent in October to December 2022.

While that’s only a minimal increase, Mr Hunt might still be cheered by the figures going in this direction.

Will Hunt’s back to work drive take off?

Back in March, Jeremy Hunt declared his back to work scheme in the Spring Budget announcement. Whilst it’s possibly too early to say whether this marks the start of a trend, we also have to ask what’s driven this change in people’s habits. After all, it coincides with a period of soaring inflation and rising interest rates.

As the IFS says: “If indeed there is a turnaround and it has been triggered by the cost of living crisis, it is no cause for celebration – that would represent people responding to becoming poorer.

“At best, one might read it as evidence that some of these people are not as far removed from the labour market as we might have thought, meaning that perhaps policy action could entice them to return for more positive reasons than an inflation shock.”

There’s also the possibility that many people who have retired early have become aware of just how long their pension funds are likely to last.

If you’re one of those who wants retirement to mark a definitive end to your working life, where you can focus on leisure pursuits, passions and family time, you won’t want to be forced to go back by necessity or because of financial constraints.

How to know if going back to work is right for you

However, if the recent news and the cost of living crisis is making you seriously consider the possibility of going back to work after retiring, but you’re unsure if it’s too big a risk, here are some pointers that might be able to help you make a decision:

It can help boost your finances

Let’s start with the most obvious benefit- it will give you an additional source of income. Since retiring, you may have chipped away at your savings at a quicker rate than expected, or you might just want to improve your financial situation.

Flexibility on work hours

As there is a huge drive to get retirees back to work, you may be in a strong position to be able to choose the exact hours you want. If you retired after being a full time employee, you may only want to go back part-time, to help maintain a better work-life balance than pre- retirement.

Try something new

Coming out of retirement doesn’t mean you have to go back into the same sector you once worked in. maybe you’ve been waiting for the right opportunity to try a career change or maybe even go self-employed with a hobby that can turn into a source of income.

You might simply be bored

And finally, it could just be a simple case of needing something to itch that scratch of being kept busy throughout the day, and going back to the workplace may just satisfy your boredom!

We’re here to help

You may be thinking about going back to work after becoming a retiree. If you’re wondering what your financial options may be if you were to go back to the work place, we are here to help. To speak to one of our friendly advisors, get in touch here.