For some, retirement will mean travelling the world, while for others, it could mean the time to spend with loved ones or to take up a new skill. And, with no set retirement age now in place, some may opt to finish working before reaching state pension age – while others will continue in the workforce.
This week, Nigel, 64, has explained what his retirement currently looks like, as well as looking back at the financial decision he’s most pleased about having made.
Nigel, from south east Wales, lives with his wife in a rural part of the country.
A former senior manager at Lloyds Banking Group, Nigel worked for the company for around 30 years, and went on to work in the charity sector after being made redundant.
“About four or five years ago, as I was turning 60, I thought I need to think about when I might want to retire,” he says.
Nigel retired from full time employment around three years ago, however he explains he has experienced “a transition” between work and retirement – having had some involvement in property development, as well as part-time research work.
“Although I’m retired from full-time work and that career as such, I’m still earning a little bit of money here and there,” he says. “I wouldn’t necessarily have to do, but it’s sort of evolved as a lifestyle choice that I would like.”
While the additional income may come in handy on top of his pension, Nigel explains the work is something he enjoys doing for reasons other than the money.
“The importance of it I suppose is once you’ve set your stall out, to say that I’m going to retire from full-time work and I now believe that I’ve got enough money to live reasonably comfortably, that doesn’t stop you having aspirations to do other things.
“It doesn’t stop me saying, ‘Do you know what, instead of just one holiday or two holidays, why don’t we have a little bit more?’
“But there’s also a social element to wanting to keep working of course. Because, one thing you might notice when you retire is all of a sudden you don’t have all your work mates around you, so that can be a difference as well.
“So I think it’s a transitional thing, but money isn’t necessarily the most important thing [about part-time work]. It’s finding something to do and the money is very nice.”
Nigel adds: “Whilst at this stage of life you’re still able to go out and do a little bit of work, then why not do it?
“Because I think as you get older and older then those opportunities might become less – but certainly maybe your appetite or your ability to do it will certainly be much reduced. So it makes sense to do something while you can.”
Nigel is due to reach his state pension age in two years, however he believes that the state pension should become more flexible to reflect how people are gradually phasing themselves into retirement – a call put forward by Aviva this week.
“I think it would be really important because at the moment it’s a very binary thing,” he says.
He says of his state pension: “It would be really useful to be able to defer some of that to later on to that period of time to when I’m either not capable or not motivated or whatever to actually earn any additional money.
“And therefore, it would enhance my state pension for later on in life.
“There’s other challenges later on in life that require funding as well so you need to be able to manage these things.”
However, Nigel points out: “You’d need to take account of your future requirements as well.”
The suggestion of state pension flexibility isn’t something which Aviva points out would require guidance and advice.
That’s something which Nigel believes is “critical”.
“I didn’t have any advice at all and I actually think that pensions are a really important,” he says. “So critical – absolutely people need to have some advice in their late 40s.
“But I think as well that should be augmented with some advice in the mid twenties. I think people need to understand. I know there are lots of other financial pressures on people in their mid-twenties but they need to understand that it’s never too late to start saving up for pensions.”
As well as advice for those in their mid twenties and mid forties, Nigel suggests people reaching the age of 60 seek advice too.
Nigel reflects on his financial milestones – was there a stand-out decision he’s made which he is really glad about?
“I don’t know why I did it and maybe it was because it was mandatory to do it at the time, but contributing to a pension scheme very early in my career has proved to be a very very important factor,” he shares.
“Because that now – my occupational pension from work – is a significant part of my retirement income.
“If I hadn’t have done that investment early on then I wouldn’t be in the position that I am now.
“I think that that was probably the most important and key thing. Because you’re actually retired a long time – well we hope so.”