One in six (16 per cent) retirees have either returned to work or are considering doing so as rising living costs continue to squeeze retirement incomes, research from Standard Life has revealed.

The findings also showed that almost a third (30 per cent) of retirees believed their standard of living had worsened since leaving work, compared to just 22 per cent who said it had improved.

Many retirees also admitted to being underprepared for later life, with one in five (20 per cent) saying they had underestimated how much money they would need, while 21 per cent wished they had planned their retirement more thoroughly.

The research suggested that inflation had played a key role in shaping retirement outcomes, with analysis indicating that £100 in 2020 was now worth just £78.25 in real terms, significantly eroding spending power over a short period.

More broadly, the data pointed to a longer-term shift towards more flexible retirement patterns, with an increasing number of people combining work and retirement.

While this trend temporarily reversed during the Covid-19 pandemic, it has since resumed, with more over-65s now earning income alongside their pension.

However, challenges remain, particularly as confidence in the ability to continue working declines with age.

Indeed, while 78 per cent of individuals believed they could still do their job at age 60, this fell to 49 per cent by age 70, with health concerns, retraining needs and age discrimination cited as key barriers.

Standard Life retirement savings director, Mike Ambery, noted that retirement was increasingly becoming a flexible, evolving phase of life rather than a fixed point.

“Retirement is no longer a single moment where work simply stops,” he stated, adding that for some, returning to work helped maintain social connection, while for others, it reflected financial necessity amid rising costs.

He argued that in a more uncertain economic environment, it was crucial that individuals engaged with their financial planning, regularly reviewed their pension savings, and considered how best to generate a sustainable income throughout retirement.

Ambery also stressed the importance of planning for the gap between retirement and state pension age, as well as exploring flexible or phased retirement options to support better long-term financial security.

"Taking time to consider the kind of lifestyle you want, exploring phased or flexible retirement options, and seeking guidance early can help people make more informed decisions.

"Planning ahead means people are better placed to manage their money with confidence and achieve greater financial security over the long term.”

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