How the cost-of-living crisis is causing many people to delay retirement or even un-retire and go back to work

Retirement should be one of the most monumental moments of your life. After many years of working hard, the day you retire is one you’ll expect to savour, as you say goodbye to your workplace and look forward to an exciting new chapter in your life. Yet the reality for millions of people right now is that the line between working and retirement is increasingly blurred. In many cases, retirement dates are being pushed back, and retiring itself might not prove as transformative or as final as you’d like it to be.

January 2023 research paints a challenging picture for the latest generation of people moving into retirement. It found almost a quarter are having to delay their retirement, retire partially or even go back to work after retiring. The cost of living crisis is one of the key factors behind this unexpected change of plans and it’s a scenario you’d do well to consider making plans to avoid.

The aim of retirement for most is to be able to do what you want, when you want. Without the obligation to work, you can put your family first, go on more holidays and devote more time for your hobbies and interests. But your retirement aspirations will only be achievable if you have the finances to make it work and that is the big issue facing many retirees.

Frugal Times

The cost-of-living crisis is a clear issue because the day-to-day challenges of soaring food and energy bills have seen many people raid their pension pot to afford rising prices over the past 12 months. This is taking money away that was ear-marked for their retirement. Figures from HM Revenue & Customs show there was a 21% increase in flexible pension withdrawals between April and June 2022, compared to the same period a year before.

Planning for a stronger future

If you’re still working and retirement is starting to appear on the horizon, these findings underline the importance of having strong long-term plans and it’s never too early to check how prepared you are for the future. Speaking to a financial adviser is highly recommended. They have the expertise to review your current arrangements. They can map out your retirement in years and the way your needs are likely to change through retirement, to highlight find any gaps that might be helpful to address.

it’s not just about how much you’re paying in. For example, you might be taking more, or less risk than you’d be comfortable taking and as you get closer to your retirement, you might want to adjust your investment strategy – depending on how you plan to fund retirement. These are key areas an adviser can help you to work out.

Hopefully you’re on track and don’t need to do much more, but it doesn’t hurt to find out now rather than leaving it too late and having to evaluate your options when you should be putting your feet up and enjoying retirement. Acting now on what you’re doing, or not doing could make all the difference in offering you that freedom when the times comes.

If you would like to speak to an Independent Financial Adviser about your pension please do get in touch:

Affinity Financial Advisors Ltd, High House, Harlington Rd, Uxbridge UB8 3HX

T  |  01895 810134  E  |

Affinity Financial Advisors Ltd are regulated & authorised by the Financial Conduct Authority.

*The tax treatment of pensions in general and tax implications of pension withdrawals will be based on individual circumstances, tax legislation and regulation, which are subject to change in the future.

*Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means tested benefits. Accessing pension benefits is not suitable for everyone. You should seek advice to understand your options at retirement

*The value of your investment can go down as well as up and you may not get back the full amount invested. A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Pension income could also be affected by interest rates at the time benefits are taken.


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