Why 2.8 million retirees have returned to work

11 September 2024

Written by Retirement Line

A growing number of retirees are finding themselves back in the workforce, according to research by Legal & General. 

L&G’s research has revealed that approximately 2.8 million individuals over the age of 50 have returned to work after previously retiring. 

This trend has emerged despite the fact that only 3% of retirees had initially planned or considered a return to full-time employment.

Dubbed ‘returnees’, many are not stepping back into their full-time roles. Instead, they are opting for part-time or seasonal positions. The driving force behind this shift is said to be the higher cost of living, with more pressure now to make finances stretch further.

Financial pressures faced by retirees

The financial landscape for retirees in the UK has become increasingly challenging. The primary issue is the rising cost of living, which has outpaced the growth of many retirees' income sources. 

Essentials such as housing, utilities, groceries, clothing and fuel have seen significant price increases in recent years. For some retirees, this means their pension income and savings are simply not enough to cover their daily expenses, let alone provide a comfortable retirement. 

This shortfall forces retirees to look for additional income sources. According to Legal and General, over a third (37%) of returnees have gone back to work because they need a greater income to cope with these rising costs.

Inflation has of course fallen from the 11.1% that it reached in October 2022 – a 40-year high. But it doesn't mean prices are falling, only that they are rising less quickly than before.

‘Returnee’ reasons beyond financial necessity

While financial pressures are a significant driver, they are not the only reasons that retirees are rejoining the workforce. Mental and emotional wellbeing also plays a crucial role. The research by L&G found that 62% of returnees wanted to stay mentally active, and 32% sought to regain a sense of purpose through work.

Retirement can sometimes lead to feelings of isolation and a loss of identity for those who were deeply engaged in their careers. Returning to work can provide social interaction, intellectual stimulation and a structured routine. All of these might contribute positively to someone’s overall wellbeing.

Challenges of returning to work

Despite the benefits of returning to work, there can be challenges. The transition back to work can be physically demanding, particularly for those who have been out of the workforce for a while. According to the research, 24% reported experiencing tiredness.

Returnees may face other challenges. too. In L&G’s survey, 22% lamented the loss of free time and 17% struggled with the changes in working culture. 

But many returnees do find the experience to be enriching and rewarding. The opportunity to engage with new people, learn new skills and achieve financial stability can bring a new and exciting sense of purpose in later life.

For some, it’s a chance to explore new career paths or pursue passions that were previously sidelined, proving that it’s never too late to embark on new adventures!

Sources:

2.8 million individuals over the age of 50 have returned to work: Nearly 3mn people return to work after retirement: FT Adviser. Accessed 07 August 2024.