Many people in the UK often view retirement as a “cliff edge” where one day you’re working, and the next you’re not. In reality, the next chapter of your life can be much more flexible.
You might stop working altogether, only to decide later that you miss the routine, social interaction, and sense of purpose that your career gave you.
Moreover, you may want to go back to work and earn more to fund the lifestyle you want. According to Allianz Life, 67% of Americans surveyed in 2026 said they worried more about running out of money than passing away.
Meanwhile, 57% said they felt anxious about their future financial wellbeing when their retirement investments fell during a market downturn.
While these figures relate specifically to the US, concerns about making retirement savings last are familiar to people the world over.
“Unretiring” could significantly boost your income, but is it right for you? Read on to discover some pros, cons, and alternatives here.
Returning to work could give your retirement fund some much-needed breathing room
If you’re concerned about your pension being enough to last a lifetime, earning an income again could ease the pressure on your retirement fund.
Rather than relying entirely on withdrawals from your pension fund and investment portfolio to meet everyday expenses, your “unretirement” earnings could cover some, or all, of your regular spending.
In turn, you may be able to reduce the amount you withdraw from your retirement savings, which could be especially useful after a period of market volatility. If returning to work allows you to reduce withdrawals, you could potentially give your investments more time to recover – just remember that future investment performance can never be guaranteed.
Depending on the rules where you live and the type of pension fund you have, working again may also allow you to resume, or even increase, your regular contributions.
Of course, you don’t necessarily have to return to the same demanding career when you unretire.
You could, for instance, decide to work part-time, take on a consultancy role, or start your own small business. These less demanding work pursuits could provide additional income without taking over your retirement.
Additional income could affect your tax position, especially if you’re an expat
Although returning to work could help you cover costs and preserve your retirement fund, it’s vital to remember that there are several drawbacks to consider.
Additional earnings could affect how much tax you pay, while pension, social security, and retirement income rules may vary considerably depending on where you live.
If you’ve moved to a new country during retirement, everything could become slightly more complicated. For example, you may have income and pensions in several countries, and returning to employment could affect your tax position in ways you hadn’t anticipated.
There are also restrictions on how much you can contribute to a pension after you’ve started drawing from it.
In the UK, the standard pension Annual Allowance stands at £60,000 in the 2026/27 tax year. If you’ve already flexibly accessed your fund through drawdown, however, you may trigger the Money Purchase Annual Allowance (MPAA).
This typically reduces the amount you can tax-efficiently contribute to a defined contribution pension to £10,000 a year.
Of course, different rules apply in other countries, so don’t assume you can continue saving in your pension the same way you did before retirement.
2 helpful alternatives to unretiring
1. Save more while you are still working
Your final years of work may be when you’re earning the most, giving you the chance to increase pension contributions.
How much you can contribute tax-efficiently will depend on the pension and tax rules where you live. However, reviewing your plans several years before you’re due to finish working could highlight a potential shortfall while you still have time to address it.
In fact, you may discover that:
- Increasing your pension contributions now could close the gap
- Working for another year or two could significantly bolster your pot
- Adjusting your planned retirement spending could make your existing savings more sustainable.
Taking these steps long before you stop working could give you far more choice later down the line.
2. Consider a phased retirement
Rather than moving directly from full-time employment to no work at all, you could gradually reduce your hours over several years.
For instance, you might move to a four-day work week initially, then work two or three days before eventually stopping entirely. Or, if you run a business, you could start handing responsibility over to others while remaining involved in a reduced capacity.
This type of phased retirement could let you enjoy more free time while still receiving some employment income.
It could also make the emotional transition easier if you’re unsure how you’ll adjust to suddenly having fewer commitments or social connections.
A financial planner can help you decide whether unretirement is right for you
There’s nothing inherently wrong with returning to work after retirement. However, if you’re considering going back solely because you’re concerned about running out of money, it may be worth seeking advice.
Cashflow modelling could help you understand how long your existing wealth might last under different circumstances.
For example, we could model what might happen if you returned to work for two years, worked part-time, or remained retired and adjusted your spending instead.
For expats, we can also consider how pensions, tax rules, and currencies across different countries might affect your retirement plan.
This could help you make decisions based on your long-term situation rather than any short-term market movements or financial anxiety.
Get in touch
Our financial planners work with British expats and international employees worldwide, so to learn more about how we can support you, please get in touch.
Email enquiries@alexanderpeter.com or give us a call on +44 1733 916909.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate tax planning or cashflow planning.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
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.
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