One in seven retirees is returning to work as financial pressures, a lack of pension provision and social needs drive them to 'unretire', according to new research.

Standard Life’s Retirement Voice report found almost one in ten (9%) retirees aged over 55 have 'unretired' or are actively looking for work, with a further 6% considering doing so.

It also found that a third (34%) have gone back to work due to increased living costs, while more than a quarter (27%) found their pension was not sufficient to live off.

Others that have gone back to work post-retirement cited social reasons, with 38% feeling bored, and a fifth, 20%, simply feeling lonely.

Winding down work could help people better cope with retirement financially and socially, said Standard Life. Its analysis suggests that gradually easing into retirement could provide an alternative to today’s cliff-edge retirement model, while improving finances adding a significant amount to the overall value of a pension pot.

For example, someone that began working on a salary of £25,000 per year and paid the minimum monthly auto-enrolment contributions (5% employee, 3% employer) from the age of 22, could have a total retirement fund of £193,000 by the age of 66 – in real terms, adjusting for 2% inflation a year.

However, someone that worked three days a week from the age of 66 to 70 could add £27,000 to their pension pot. Working just one day a week for a few years after reaching retirement age could add as much as £21,000 to a retirement fund - £18,000 from fund growth due to delaying starting to access pension savings from 66 to 70, and £3,000 due to the additional contributions of working one day a week. The figures are adjusted for inflation. 

Impact of working past retirement age

*If beginning working with a salary of £25,000 per year and paying 5% monthly employee contributions and 3% employer contributions into a workplace pension at the age of 22 and assuming 3.5% salary growth and 5% investment growth per year. Figures are reduced to take effect of a 2% inflation assumption. Annual management charge of 0.75% assumed. The figures are an illustration and are not guaranteed. Earning limits not applied. 

Source: Standard Life

Mike Ambery, retirement savings director at Standard Life, part of Phoenix Group said: “Money isn’t the only reason people return to work after retiring - but it certainly seems to be a big factor. Recent retirees couldn’t have foreseen the cost-of-living issues that have squeezed their retirement incomes, and many are now being forced to rethink their plans and return to work to supplement their income.”

He said in future it’s likely that more people will shun the traditional cliff edge retirement and instead gradually reduce working hours or take on part-time work.

• Ipsos Mori conducted the research among 6,000 UK adults. Fieldwork was conducted between July and August 2024. Data was weighted post-fieldwork to ensure the data remained nationally representative on key demographics.