The study by L&G found that 34% of over-55s who are still in some form of work have taken a decisive move towards semi-retirement.

About half of employees aged 55+ (48%) expect to take a phased approach to retirement rather than completely stopping work anytime soon.

L&G says that a phased retirement approach will mean a reduction in income but fixed term annuities can help bridge the gap.

The study backs up recent evidence that many are delaying or deferring full retirement due to the cost of living crisis and the impact on incomes.

Despite the desire for a phased retirement, the study found that one in 10 people who had begun to 'phase' into retirement were having to increase their work commitments again.

Two fifths (40%) of people who expected to be moving into retirement in the next five years now worry living costs might make this plan unrealistic.

L&G says its survey also suggests that for many retirement is “no longer a line in the sand.”

Almost half (48%) of employees aged 55+ expect to cut down on their working hours rather than completely stopping with one in seven (14%) planning to wind down in the next year.

Many people want to take the phased retirement route, says L&G, but most people say they are making the decision because they simply cannot afford to retire fully (44%).

Table one: When asked how people were planning to phase their retirements, the most common answers were:

Source: Legal & General, 2022

On average, over half (54%) of all people who are taking a phased approach to retirement are working 15+ hours less every month and, on average, earning £9,150 less every year.

As a result, many expect to have to adjust their lifestyle (38%), and some anticipate they could struggle with paying for household essentials (17%).

Lorna Shah, managing director of retail retirement, Legal & General Retail, said: “The number of pre-retirees considering a gradual or phased move into full retirement shows how much the perception of later life has changed in recent years. However people choose to approach retirement, it’s important they see it as something that should be actively managed, and not something they already feel they are ‘in’ or have ‘done’.

“For those wanting to keep their options open, while also looking for ways to supplement their income, flexible products such as fixed term annuities can play an important role. They provide a guaranteed income for a set time – in some cases as little as three years, helping to bridge any potential gap in salary.”

• Research was carried out online by Opinium Research with 4,000 UK adults in October. The results are weighted to provide nationally representative criteria. Pre-retirees’ refers to those aged 55+ who are still in some form of work.