Dominic Stead, Property Director at retirement rentals specialists, My Future Living explains why retirement living while working can make financial sense

The issue of the pension age rising to seventy-one is being hotly debated now following new data from the International Longevity Centre[i] suggesting the UK’s state pension age must rise to seventy-one by 2050 to maintain its affordability.

It has also stirred up conversations around the evolving nature of retirement. The prospect of working into one’s seventies, as necessitated by financial constraints or personal choice, is becoming a reality for many and a growing number of people are working for longer.

Analysis of official ONS Labour Market statistics by the Centre for Ageing Better[ii]  reveals there are almost one million more workers aged sixty-five and above in the UK labour market than there were at the beginning of the century.

More than one in ten (11.5%) are now working past their 65th birthday in the UK which is double the one in 20 (5.2%) working in 2000. Other data from Rest Less, the platform aimed at the over fifties, shows there are significant numbers still working in their 70s[iii] and even 80s[iv].

These changes have prompted some to reconsider their retirement plans and explore new possibilities before they stop working full-time, including where to live. One emerging trend is the idea of transitioning to a retirement community whilst still working.


Easing into retirement

Most people are unaware they can enjoy the benefits of living in a retirement development if they work full or part-time. Many of our residents still work and decided to move to a retirement property before they gave up work. It was part of their retirement plan to ease into retirement living.

Renting in a retirement development is all about independent living but being part of a community of likeminded people. Most developments are aimed at people aged over 55 years of age, but despite what the perception is, they are not just for retired people.

Choosing to downsize and move into a rental retirement community can enable people to release capital from a house sale which can be used to help fund their retirement. Organising finances prior to stopping work can also mean that people have a far clearer idea of how long they need to work. It can also enable them to reduce household bills and expenditure in the run up to retirement, especially if they have a large home that is a drain on their finances. These additional savings can boost their retirement funds significantly.

A key benefit for those that downsize is no longer having the burden of on-going property maintenance. If people’s retirement plan has always been to downsize and sell-up, doing it as early as possible is another way to make potential savings.

The social side of living in a retirement is another benefit of living in a retirement development as many developments host social events and outings, which can be a real lifeline especially for single people.

Getting involved and making friends before stopping work can help the transition to retirement. No longer having a daily structure and work colleagues can make retirement difficult to start with. Being already part of a vibrant community can be make this an easier process. For couples where one still works and the other has retired moving to a retirement community can also be beneficial.


A real-life success story

One of our resident couples, Paul and Lindsey Jones recently downsized from a Victorian house to a rented apartment in Hometor House in Exmouth. Lindsey is 63 years old and still works as a part-time nurse, whilst Paul, 68, is a retired landscape gardener.

Their move was promoted by spiralling rent and the ever-growing burden and cost of maintaining their spacious Victorian house. Downsizing to the apartment has brought unexpected benefits for Paul including being able to socialise and have people around for a cup of tea when Lindsey is at work.

The couple are embracing their new social life and enjoy being part of a community. There are tea parties and bingo nights, as well as organised coach trips which they go on when Lindsey is off work, events which have helped the couple settle into the community.

Their new apartment has offered financial advantages too as it is cheaper to run. It is highly insulated which means it scores high on energy efficiency and the couple have noticed these savings in their bills. Their car insurance is also cheaper because the car is now parked in a gated, private car park instead of a busy road.

The couple rent on an assured ‘lifetime’ tenancy which gives them the reassurance they do not have to move again (providing they keep up with the terms of their tenancy agreement). Also, they do not have to worry about major rent increases as the annual rent increases are also low and are linked to the Retail Price Index (RPI).

Now, not only do they benefit from a lower rent due to downsizing, but they know what to expect in terms of increases, which they did not when renting their previous home. Paul and Lindsey’s experience highlights that downsizing and moving to a retirement community whilst still working has been a real success story. They are making considerable savings as well as immersing themselves in a community ready for when they are both retired.


To conclude

Transitioning to retirement living while still working, is a forward-thinking choice in today’s retirement environment. It can offer individuals the opportunity to live independently, downsize, and future-proof their lives while actively engaged in the workforce.

Like Paul and Lindsey, people can gain financial, social and lifestyle benefits. As the nature of retirement evolves and people work longer, embracing retirement living before stopping work is a trend we expect will grow as people recognise the benefits it can bring.