The number of over-70s in work has more than doubled over the past decade. We explain the health and social benefits, and offer a financial fact check for a ‘working retirement’.
More and more people are choosing to work on into what would ordinarily be a period of retirement: the latest figures from the Office for National Statistics show that the number of over-70s in work has more than doubled over the past decade to nearly 500,000 people.
Working on in some capacity can boost your retirement income, but Stuart Lewis, founder of Rest Less (restless.co.uk), a job and volunteering website for the over-50s, says there are other reasons to work on beyond the customary retirement age.
“Many health and social benefits come with working into retirement, such as staying active and socially connected, and feeling fulfilled,” he says. “Work patterns are changing: people no longer want to work for four and a half decades and then suddenly go cold turkey in retirement.”
Whether you are looking for work to top up your pension or because you enjoy working, there are plenty of opportunities to be had. Thanks to greater flexibility in the workplace, it’s even possible to build up a portfolio of work based on activities you enjoy doing.
Here are some options that may be worth considering.
Using your experience to become a mentor can be fulfilling and financially rewarding. Peter Doggett, a 71-year-old former managing director, is now a chairperson with the leadership development organisation Vistage (vistage.co.uk). “I started out as a member in 2002 and Vistage helped me through the process of closing down the business I worked for,” he says. “Retirement didn’t really appeal and I’d always enjoyed helping people develop, so I decided to become a chairperson.”
Responsibilities include recruiting members and coaching them in developing their businesses, and facilitating monthly meetings, which requires around three days’ work a week. Members pay around £10,000 a year, with the chair taking a percentage of this. “It offers me variety, and I love giving back to other members,” says Doggett.
2) Working holiday
Experience and maturity can make you attractive to holiday firms, as a tour leader, holiday rep or campsite courier, for example.
With some opportunities, you get paid, but it’s also possible to volunteer. Effectively, you get a free holiday in exchange for hosting duties. “We look for people of all ages with walking experience and people skills,” says Rachel Toyn, volunteer leader recruitment coordinator at walking specialists HF Holidays (hfholidays.co.uk). “Often they will start out where they’ve walked before, but once they’ve gained experience, they could go anywhere.”
The minimum commitment required is three weeks every two years. “Our leaders stay with us for 10-15 years on average and one has just retired after 56 years,” Toyn adds.
3) Get on board
Taking up a non-executive director (NED) role on a company board allows you to use your expertise to advise, guide and challenge the directors of a business. The typical path to a NED career is to work in executive management or build experience in the charitable and public sectors. Being a school governor, for example, can be a good stepping stone.
According to the Institute of Directors (IoD), remuneration for FTSE NEDs starts at around £50,000 a year, but it is usually lower with smaller firms. The IoD warns against ‘over-boarding’, but it says it’s possible to balance a portfolio of NED roles.
Women are seriously under-represented on boards (Boardappointments.co.uk), but Women on Boards (Womenonboards.net) is dedicated to reducing that imbalance.
Going back to university as an exam invigilator can generate additional income in retirement. The busy months are January, May/June and August. Pay ranges from £9 to £11 an hour, and earnings may be topped up with holiday pay and pension contributions.
Allen Nixon, 75, from Northallerton, has been invigilating at a local school and Leeds University for six years. He says: “I can pick the sessions I want to do. This means it fits well with my other commitments, which include public speaking and an annual stint as Father Christmas at a local garden centre.”
He found his invigilation opportunity through friends, but he recommends contacting a school or university’s exam officer to get started.
5) Sharing economy
Renting out a room or second property through Airbnb is a relatively well-known way of making money in later years, but it’s also possible to make money from your car. Drivy (Drivy.co.uk) allows its customers to rent out their cars to generate an average monthly income of £560.
Identity checks and insurance are included in Drivy’s package. Transactions are completed through an app, while keyless technology enables hirers to access your vehicle using their phone.
Ted Baillie, 69, from London, rents his Audi A4 out for £70 a day. He says: “This covers my car’s running costs, which helps me run a not-for-profit organisation, NewConnections, that supports prisoners with addictions. It works really well. I can block out the days when I need the car and make money hiring it out when I don’t.”
6) Support a good cause
Where topping up your pension isn’t your key objective, voluntary work is a popular option. Rest Less has found that one in four people plan to volunteer once they retire. A diverse range of opportunities can be found through organisations such as Do-it.org, Volunteering England and Volunteering Matters.
Volunteering Matters runs a ‘grandmentors’ project, where older volunteers support young people leaving care, and a Sporting Chance project, which helps older men improve their mental and physical wellbeing through social groups and exercise classes.
You could set up your own charity. Ted Baillie aims to do this with his not-forprofit organisation, NewConnections. “There are legal hoops to jump through,” he says. “But there are benefits, especially around fundraising.”
7) Teaching abroad
If you are keen to travel, teaching English as a foreign language (Tefl) can open the door to just about any country in the world. Ali Wilson, an adviser at training company Tefl.org, says it’s not just for 20-somethings. “We have students of all ages,” she explains. “They might want to travel, retire abroad or volunteer overseas.”
Age can be an issue in some countries. “There are strict rules around retirement in some Asian countries – China and Vietnam, for example – but you could still volunteer,” she adds.
It’s not essential to have a Tefl qualification, but it can help. Wilson recommends an internationally recognised one that entails at least 120 hours of training, whether online, in the classroom or a combination of the two.
8) Public service
Becoming a local councillor can be a great way to represent and shape your local community. To stand for election you’ll need to get 10 people in your ward to sign your nomination paper.
The average commitment is about 25 hours a week. There is no salary on offer, but councillors get a members’ allowance in recognition of the work involved. This ranges from around £2,000 a year to £40,000-plus.
You could become a magistrate (magistrates-association.org.uk) if youth is on your side. Magistrates are expected to serve for at least five years and then retire at 70, so you’ll need to be under 65 to apply. The nature of the work means that the application process is robust, and if you are successful, you’ll be expected to undertake 21 hours of training before you can take up court duties. Again, the work is unpaid, but modest allowances are granted to cover costs and financial losses incurred.
Financial fact check for a ‘working retirement’
Reach state pension age and you’ll no longer need to pay national insurance, but with income potentially coming from a range of sources, it’s sensible to keep an eye on your income tax position.
The state pension is paid gross, but it is taxable. Deferring it can help you keep your tax bill down if you are still working, but Jeannie Boyle, director and chartered financial planner at EQ Investors, recommends looking at the figures first.
“Check whether the increase in income you would get by deferring is high enough to compensate you for the years of income you will forego,” she says. “The state pension increases by 5.8% for every year it’s deferred. You could also defer a final salary pension, although there may be relatively little extra benefit if you do this.”
It can be worth topping up your pension, especially if you get 40% tax relief. However, if you plan to do this, make sure you don’t inadvertently reduce the amount you can contribute. “If you draw taxable income from a pension (not a final salary-based pension), you may be limited to annual contributions of just £4,000,” says Boyle. “This doesn’t apply if you’ve only taken tax-free cash.” (See Pension Clinic: beware pitfall of taking pension cash early, for more.)