The UK is witnessing the march of a new type of retiree as the first post-war “baby boomers” pass the old Default Retirement Age of 65. According to Aviva’s latest Real Retirement Report, more than one in three (39%) over-55s are continuing to receive a wage and nearly half are intent on using their extra earnings to travel more when they finish full-time work.
Data from the latest census in 2011 showed there were 754,800 people aged 64 in England and Wales, and almost 6.5 million people are turning 65 over the next decade compared with 5.2 million in the previous decade. The spike is due to the post-war birth rate soaring when the armed forces returned from the Second World War, with the new-born generation dubbed the “baby boomers”.
Allied with improved health care, more people are remaining active as they approach retirement age, and the latest Aviva report shows how they are pushing back the boundaries at work and in their leisure time. One in four (23%) 65 to 74 year olds were still wage earners in December 2012, compared with 18% when the report first launched almost three years ago in February 2010.
With 55% of 55 to 64 year olds doing the same, compared with 41% in February 2010, this trend looks set to continue as more baby boomers pass the age of 65. It has already fuelled the rise of income and savings among over-55s during the last three years. The typical over-55 now has an income of £1,444 each month along with £14,544 in savings (December 2012), compared with a monthly income of £1,239 and savings of £11,590 in February 2010.
Despite 80% being concerned by rising living costs over the next six months (December 2012), the UK’s over-55s are determined to enjoy the benefits of extending their working lives. Nearly half (44%) plan to use their extra time in retirement to travel more, while 42% are focused on spending more time in their gardens.
Socialising is high on the agenda for many over-55s in retirement, with 37% planning to invest extra time in their families and 33% keen to socialise more with friends.
They also have philanthropic intent: two-thirds (66%) of over-55s would be interested in carrying out charity work or volunteering once they have retired. The most common motivation is to give something back to the community (49%) and to stay active by getting out of the house (48%).
Roger Marsden, head of At Retirement at Aviva, commented:
“What we are seeing is the first baby boomers setting out a new model for later life, and getting the most out of their improved physical health and the freedom to continue working for longer. Many people find that staying active in a job helps to keep them young at heart – with the bonus being that it boosts their earning and savings potential in the process".
“The key to making the most of this opportunity is for people to start planning for their retirement well in advance. This way, as you approach the age of 65, you have the freedom of choice about whether you continue to work or not, rather than feeling forced to carry on out of the demand to meet financial commitments.”
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Aviva is working in partnership with Railway Children through the Aviva Street to School programme to get children living or working on UK streets back into everyday life. Find out more at www.aviva.co.uk/street-to-school.