Downshifting - exploring the semi-retirement movement

23 June 2025

Written by Retirement Line

A fixed date being the clear-cut milestone for retirement is a thing of the past for many people. Semi-retirement is now a reality for millions – whether through choice or financial necessity.

Rather than fully stepping away from working life altogether, semi-retirement is a stage between full-time work and complete retirement. It could mean reducing your hours or responsibilities in a job you’ve held for a while, or doing something different altogether.

It can take many forms, as these examples help illustrate:

• A former teacher might work a few days a week as a tutor.

• A corporate professional may offer consulting on a freelance basis.

• Others might take on part-time roles in retail, hospitality, social care, or other sectors that welcome mature workers.

What might be driving semi-retirement?

‘Downshifting’ into semi-retirement can be the choice of those looking for a blend of financial wellbeing and personal fulfilment, a desire for purpose, or the simple enjoyment of staying active. 

Many people are able to gradually phase out their working life in the run up to receiving the State Pension at 66. According to Aviva research published in 2023, this is the plan for 2-in-5 people aged 55-64.

But for others, it can be a less welcome decision driven by financial necessity. It’s often a situation where someone works beyond State Pension age. That’s a reality for over 1.1million people in the UK, according to a 2023-34 survey by the UK Data Service.

The cost-of-living crisis has hit many people hard, from soaring energy bills and prices in the supermarket since 2022. Even with inflation slowing in 2025, many people are finding that their pension doesn’t stretch as far as they once expected. 

Continuing to earn, even modestly, can help maintain their lifestyle. For some, it can also allow them to delay accessing their savings.

The positive side of semi-retirement 

Other drivers might be at play for semi-retirement choices at any age:

People living healthier, longer lives. We're living longer, and often staying healthier well into our 70s and beyond. As a result, retirement is no longer always seen as a time to slow down completely. Many older adults feel physically and mentally capable of continuing to contribute, and they want to stay engaged.

The need for purpose and connection. Work often provides structure, identity and a social circle – losing these in retirement can bring isolation rather than freedom. Semi-retirement allows people to retain those benefits without the full commitment of a traditional job.

Relishing new challenges or opportunities. Are there skills you’d still like to develop, or even passions you’ve never explored? Semi-retirement can involve trying something completely new, with all the excitement and fulfilment that can bring. 

Increased flexibility through technology. The pandemic years showed employers and workers alike that many roles can be done remotely or flexibly. That shift has opened up opportunities for older adults to work from home, perhaps on a freelance basis, rather than facing the stress of commuting or rigid hours.

Things to consider before downshifting

Semi-retirement can have plenty of upsides, but it's important to think through some of the potential financial issues: 

1. Tax implications

If you're receiving income from both part-time work and your pension, your total income might place you in a higher tax bracket. It’s worth checking your situation with an independent financial adviser or using HMRC’s online tools.

2. Impact on benefits

Earnings from work could affect eligibility for means-tested benefits like Pension Credit or Housing Benefit. If you’re claiming any support, be sure to understand how working could affect your entitlements.

3. Pension issues

If you wish to access your own pension savings early to fund semi-retirement before State Pension age, make sure you understand the implications. Talk to your pension scheme or seek financial advice if you feel you need to.

Is semi-retirement right for you?

Only you can decide whether semi-retirement would work for you. It’s not a one-size-fits-all solution, but it can offer a rewarding alternative to stopping work entirely. 

The reality is that, for many people, State Pension age doesn’t have to be the date when you have to switch from nine-to-five to a life of leisure. Downshifting from full-time to part-time work can be the perfect way to ease into full retirement.