Why it’s time to rethink retirement

The retirement age is over 

This is a critical point for the pension industry. In a fast changing world, we need to completely rethink our approach to our products and services to meet the evolving demands of our workforce. 

Retirement is no longer a single ‘cliff edge’ event where people reach a particular age, stop working and move into an entirely different stage of life. There is no set retirement age and as our 2026 research report: Away from the cliff edge highlights, more people than ever actively want to work for longer.  

For many people, later life is going to be a complicated mix of paid work, caring for family, volunteering and leisure, with people moving between these things at different points.

“44%  of all people and nearly half of women feel the word ‘retirement’ doesn’t describe their expectations for later life.”

It is perhaps not a surprise then that our research found that for a large proportion of the population the word ‘retirement’ no longer resonates. 44% of all people – and nearly half of women – feel the word ‘retirement’ doesn’t describe their expectations for later life. It might be time to retire the concept of a traditional retirement altogether.

People want to work for longer 

Our research also showed that over a third of people would like to keep working beyond traditional retirement age in a flexible or part-time role.  

People are living longer, healthier and more varied lives. And while financial security plays an important part in their decision-making, many people want to maintain the sense of purpose and structure work gives them. But they also want the freedom to work on their terms.

The pandemic and advancing technology have proved that people can be productive with less rigid structures. From hybrid arrangements to sabbaticals, job shares and career breaks, flexibility allows people to balance their work commitments with free-time, caregiving and family life. It means people can create a better blend of work and leisure from an earlier age and that a balanced lifestyle will help them to work for longer.

And while office workers have led the way with initiatives like working from home, the principle can and should be applied across all workplaces, even if home-working is not possible. For example, older people in physically demanding roles could be given reduced hours or shift their responsibilities towards mentoring younger employees. 

Supporting experienced employees to stay in work if they want to is good for their well-being, drives national productivity and plays a crucial role in closing the savings gap.

To be clear, this isn't about forcing everyone to work longer or underestimating the power of saving. It's about recognising that later life isn't a fixed destination. It’s about recognising it is complicated and it’s different for everyone.

The pension industry needs to play catch up 

While the way we live, work, and age has transformed dramatically, the pension industry’s mindset remains largely stuck in the past.

For too long, its focus has stayed narrowly on getting people to save more and maximising returns for a set date after which you live on a fixed income for the rest of your days. The third piece – the evolving role of work in later life – has been missed.

We have a massive opportunity to create products that are in tune with how people actually want to live their longer, more productive, lives.

So what should we do?

That is a big question. We don’t have all the answers, but we want to start the conversation. 

That said the report did highlight some key takeaways: 

• Education is fundamental 

Despite the availability of Pension Wise and similar resources, our report reveals that a large portion of the population receives no guidance at all about the important decisions ahead of them. And, that as many turn to AI as turn to the pension industry for support. The Government, employers and the pension industry need to educate people so they can properly prepare for their future – that includes helping them to understand benefits like pension credit as well as how their pension works..

• Flexibility is essential

It’s time to move away from single-point retirement products. Rigid monthly payouts can increase tax burdens and stifle growth for members. Instead, we need dynamic drawdown solutions and tools that provide personalised guidance, for instance,  alerting members if they are withdrawing too quickly. Our Smart Retire app is providing part of this solution, by giving customers control over their savings, but we need to keep evolving it.

• Customer service is at the core

Digital technology is enabling the pension industry to provide tools and apps that make it easy for people to do simple pension administration themselves at a time that suits them. But we also need to ensure people have access to human support to help them to make critical decisions or solve problems when they need it. Read about how we’re making customer service faster, simpler and more human.

It's time for some reinspirement 

The pension industry, the Government and employers need to work together to provide more support, more flexibility and more education so that people can start to plan for the future they want, whatever that may be. 

Our 2026 report shows that while there are challenges ahead there’s plenty to feel positive about. Helping people to work for longer – if they want to – will have compelling social and economic advantages. But we need to listen closely to employees and adapt and innovate to meet the needs of their new reality – where retirement as we know it is a thing of the past.

Read our 2026 research report: Away from the cliff edge.

About Smart Pension

Launched in 2015, Smart Pension now exceeds £10bn in Assets Under Management (AUM) and serves 2 million members and 100,000 employers. It is powered by Keystone, Smart’s global savings and investments technology platform.

Aquiline, Barclays, Chrysalis Investments, DWS Group, Fidelity InternationalStrategic Ventures, J.P. Morgan, MUFG and Natixis Investment Managers are all investors in Smart Pension.