There was a time when retirement meant closing the door on your career and never looking back. You’d clock off for good at around 65 or so, collect your pension and start a new life. Whether that’s pursuing your passions, taking up new hobbies, or jetting off to see places you never got the chance to. But fast-forward to today, and more people are going about retirement a bit differently.
A study by Indeed Flex found that nearly a third of UK retirees are considering returning to work to cope with rising living costs. Additionally, almost one-in-six have already ‘unretired’. The majority (53%) cited the need for additional income as the main reason.
Welcome to the world of unretirement - a growing trend where people head back into work after they’ve already called it quits. But for some, unretirement isn’t just about boosting their finances. It’s because they’re not quite ready to give up the structure or sense of purpose that work brings. Whatever the reason, it’s changing the way we think about later life - and how we plan for it.
So what does unretirement look like in practice?
What exactly is unretirement?
To put it simply, unretirement is when someone retires - either fully or partially - and then returns to work later on. That could mean picking up a part-time role, launching a freelance career, or even starting their own business. It could be a few days a week in a job that feels fulfilling, or something more casual that fits around other commitments.
But unretirement doesn’t always mean returning to the same kind of job you had before. In fact, for many people, it’s a chance to do something different. That could be something with less stress, more flexibility, or something that brings joy. The key factor is choice. Rather than working because you have to, unretirement is often about working because you want to, and doing it on your own terms.
Why is unretirement becoming more common?
There are a few reasons the trend of heading back to work later in life is gaining traction. It’s not just about money - though that can definitely play a role.
For one, people are generally living longer, healthier lives. That means hitting retirement age doesn’t always come with a desire to slow down. Many still feel healthy, sharp-minded and full of ambition. A 30-year stretch of retirement might sound appealing at first, but for some, it starts to feel like too much downtime. Especially if they miss the routine, social interaction or sense of purpose that work can bring.
That’s reflected in the numbers, too. According to the Office for National Statistics (ONS), the average age of leaving the workforce rose to 65.7 for men and 64.5 for women in 2024 - the highest since records began. More people are clearly either choosing or needing to stay in work longer. And with many of us now facing the prospect of a 100-year life, it makes sense that retirement is starting to look less like a finish line and more like a flexible, extended phase of life. You can read more about the 100-year life on the PensionBee blog or listen to episode 26 of their Pension Confident Podcast.
The way we work has also changed. With more flexible hours, remote roles and freelance gigs on offer, it’s easier than ever to earn without locking into a traditional full-time job. Whether it’s a few days a week, something seasonal or a complete career pivot, the options are out there. These types of jobs often fit around retirement rather than disrupt it.
Of course, the financial side can’t be ignored. The cost of living keeps rising, and some people find their pension or savings don’t stretch as far as they’d hoped. A return to work, even part-time, can help ease pressure or fund some of the nicer things in life. But for many, it’s not just about the money.
Full retirement doesn’t suit everyone, and unretirement offers a middle ground, one where you can still work but on your own terms.
How does this change retirement planning?
Unretirement changes how we think about retirement, not as a permanent full-stop, but more of a gradual transition. And that has some interesting implications for how we plan ahead.
If there’s a chance you’ll earn some money after retiring, you might not need to draw on your pension as early or as heavily as you originally thought. This can give your pension pot more time to grow and benefit from compound interest - where you earn interest on both the money you put in and the interest it’s already made.
It could also make retiring feel a bit less daunting. If you know you’ve got the option of picking up some extra work later down the line, it can make the idea of retiring earlier - or reducing your hours gradually - more appealing. That flexibility can be really valuable, especially if your priorities change as you get older.
At the same time, returning to work after retirement can raise new questions. For example:
how your income will affect your tax bracket;
what happens to your pension contributions; and
whether you can still pay into your pension while working.
The good news is that it’s possible to do most of these things. It just means thinking a little differently about how your finances are structured.
What unretirement means for your pension and savings
If unretirement is something you think you might want (or need) to do in the future, it’s a good idea to build that possibility into your plans now. That doesn’t mean you should assume you’ll have to work again, but it helps to be open to the idea and have some flexibility in your financial setup.
And so, here are a few things that might be worth thinking about as you head towards retirement:
Think carefully about when you access your pension - if you can afford to delay, it might be worth doing so, especially if you’re still earning income elsewhere. Delaying means your pension stays invested, giving it more time and opportunity to grow. Plus, if you’re still working, you can continue contributing and benefiting from tax relief. Usually basic rate taxpayers get a 25% tax top up while higher and additional rate taxpayers could claim more through their Self-Assessment. You can use PensionBee’s Pension Tax Relief Calculator to see how much you could get.
Save as though you’re not going to work again - that way, if you do ‘unretire’, it’s a bonus rather than a financial necessity. While you’re still earning, try to make the most of your tax-free annual allowance. For 2025/26, it’s 100% of your salary or £60,000 (whichever is lower). If you haven’t used the full amount in previous years, you might also be able to take advantage of the carry forward rule. This is where you can carry forward any unused allowance from up to three previous tax years and still receive tax relief.
Be mindful of the money purchase annual allowance (MPAA) - if you start drawing down from your defined contribution pension and then go back to work and want to continue contributing, your annual allowance (mentioned above) gets reduced to £10,000 (2025/26).
Keep some emergency savings handy - life can throw surprises your way and so having a cash buffer means you’re less likely to need to draw from your pension in a pinch. A good rule of thumb is to keep around three-to-six months’ worth of your essential expenses set aside, just in case.
These are small steps, but they can make a big difference when it comes to keeping your options open and reducing stress later on.
Can your pension still work for you if you unretire?
The answer to that is a yes, and it absolutely should. A good pension should support your lifestyle, whether you’re fully retired, working part-time, or dipping in and out of jobs.
The ability to pause or adjust your withdrawals, track your performance and make changes when needed can help make sure your pension fits around your life, not the other way round. Pension providers like PensionBee help you simplify your pension savings into one easy-to-manage online plan. You can see your balance anytime via the website or app so you’re not left second-guessing how your savings are doing. You can even see how much income your pension could generate in e retirement savings using their Pension Calculator.
Your pension should be a tool that gives you flexibility and the freedom to either stop working, return if you want to, or do a bit of both. That’s why planning ahead, staying informed and choosing the right provider should be a top priority.
Returning to work during retirement doesn’t mean failure - it can be a smart, empowering move that helps you shape your later years in a way that works for you.
Unretirement isn’t a trend that’s going away any time soon. If anything, it’s likely to become more common as we live longer, healthier lives and the lines between working and retirement continue to blur. There’s no better time to start thinking about what your future might look like, and how your finances can support it. Whether you end up fully retiring, unretiring, or doing a mix of both, having a flexible plan in place now means you’ll be ready for whatever path you choose later on.
Lee Bell is a freelance Journalist and Copywriter specialising in B2B/consumer technology, specifically AI, health and lifestyle. Sponsored by the Journalism Diversity Fund in 2009 to complete an NCTJ diploma, Lee has over 15 years of writing and editing experience. You’ll find his words in the likes of The Metro, The Sun, Men’s Fitness, Stuff Magazine and T3.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
