Canada Life last year reported that around 13% of UK adults don’t ever want to retire. That equates to around 1.5 million people and you might count yourself as one of them.

As a successful business owner, you might be close to retirement age but unwilling to let go. Maybe you’re worried about losing part of your identity or determined to stay on in a consulting role at the company you worked so hard to build.

Equally, you might be looking forward to the freedom of later life and the chance to switch careers, becoming an “olderpreneur” or joining the volunteer sector.

With a long-term plan in place, the decision to work for longer is unlikely to be a financial one. But you’ll still need to keep on top of your tax and estate planning, however long you stay in work.

Keep reading for a look at why so many UK workers are determined to keep working, and the important financial factors to consider.

There are many reasons why you might choose to delay retirement, maybe even indefinitely

You might have heard of the so-called “FIRE” movement (Financial Independence, Retire Early). It involves tight budgeting and aggressive saving early in life to enjoy the spoils of an early retirement. But many Britons want to do the exact opposite.

While a 9 to 5 might constitute a treadmill existence for some, this won’t be true for those who love their career or who are financially independent enough to stay at work because they want to, not because they have to.

Alongside a continued salary, working later in life has other benefits, including:

• Keeping your mind sharp and your brain stimulated
• An ongoing social life with people who understand the industry you work in
• A known and regular schedule to keep you active

• The chance to keep up with the latest advances and share your knowledge.

Just remember, whatever your reasons for staying at work, you’ll need to stay engaged with your long-term financial plan too.

3 financial factors to consider if you plan to work for longer or never retire

1. The importance of juggling pension and non-pension income

Working for longer, especially if you plan to take a step back and engage in some form of phased retirement, can lead to financial complications.

You’ll need to think about the composition of your income, specifically the split between pension and non-pension funds.

ISAs are incredibly tax-efficient but the £20,000 subscription limit might prove prohibitive. Pensions, meanwhile, also have tax advantages. The income you take home, though, will be liable to Income Tax, especially important if you are taking a salary at the same time.

If you plan to make withdrawals from one pension while continuing to contribute to a workplace pension, you’ll need to be careful when choosing the right retirement option for you. Certain flexible pension withdrawal strategies could trigger the Money Purchase Annual Allowance, severely limiting the tax-efficient contributions you can make.

2. Think about how and when you take your State Pension

Your State Pension won’t be your main source of income in retirement but you’ll still have some important decisions to make.

You might opt to defer it, for example. This has the benefit of increasing the amount you receive when you finally start to receive it. Assuming you reach State Pension Age on or after 6 April 2016, your State Pension increases by 1% for every week you defer, as long as you defer for at least 9 weeks. This works out at around 5.8% for every 52 weeks.

Remember that the State Pension is taxable as income so will need to be included in your calculations if you decide to keep working while claiming.

3. Consider the effects of longevity on your legacy and factor in later-life care

You might decide you don’t want to retire but that doesn’t mean that you’ll be able to work forever.

Think carefully about the protection you have in place and factor longevity and the potential cost of later-life care into your planning. Be sure you have a contingency too. This will ensure that the money you put aside for care can still be accessed or passed on tax-efficiently if care isn’t needed.

Also, remember that mitigating a potential Inheritance Tax (IHT) liability should be something you think about long before you reach your normal retirement date. Consider the impact of working for longer on the legacy you intend to leave behind and how and when you pass on your wealth. Don’t let a longer career get in the way of sound IHT planning.

Frame your goal as financial independence, not retirement

For the majority of people with a financial plan in place, retirement is the long-term goal. If you intend to work for longer, you might need to reframe this.

Rather than thinking about retirement as your endpoint, think instead about how you’ll achieve financial independence. This should help you to live the way you want to in later life, meaning that you can continue working if you want to, but not because you have to.

Just remember, there’ll be plenty of financial implications to consider, so be sure to speak to the experts before you make any important retirement decisions.

Get in touch

A well-managed plan aligned to your goals allows you to retire your way, even if that way is not retiring at all. Boolers’ expert financial advice can help with whatever questions you have so be sure to speak to us before you make any decisions.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances. Workplace pensions are regulated by The Pension Regulator.