2 in 3 'unretirees' failing to consider tax trap

Two thirds (63%) of over-55s who plan to return to paid work have failed to check the potential tax implications of doing so, according to a new report. Three in five (60%) of ‘unretirees’ have not sought financial advice, according to the new research from Wesleyan Financial Services. Over a quarter of the 2000 over-55s surveyed (26%) were planning on ‘unretiring’, that is doing, or planning to do, some form of paid work while in retirement. Linda Wallace, managing director of Wesleyan Financial Services, said that without taking financial advice the ‘unretirees’ risk falling into a tax trap. She said: “The traditional goals of ‘retire and stop’ are changing. ‘Unretiring’ is no longer a trend but a permanent feature of society and it can offer hugely positive opportunities for people later in life. But before making any decisions about whether to unretire, bear in mind that working in retirement also comes with tax implications. “If you are already taking money out of your retirement savings through an annuity or drawdown or are receiving the state pension, any extra income will boost your earnings and potentially add to your tax bill if the amount is above the personal tax threshold, which is currently £12,570. Combining salary with pension income could also push you into a higher tax bracket, increasing your tax liability.” Although more than a fifth (22%) of those who had retired and who were working, or planned to work, said they were doing so to generate additional income for luxuries like travel and home renovations, a similar proportion (19%) said it was to keep their brain active, while just over one in ten (13%) said they wanted to give themselves a better sense of purpose. Meanwhile, more than a third (36%) of those who were yet to retire, but who wanted to keep working said it was because they thought they would miss the social interaction. OnePoll surveyed 2,000 UK adults aged 55 and over on behalf of Wesleyan Financial Services in May 2024.

2 in 3 'unretirees' failing to consider tax trap

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