Some people cannot afford to stop but others are becoming more entrepreneurial, setting up part-time business sidelines or earning extra cash online.
One in 10 over-50s now hold down a second job or “side hustle” on top of their full-time role. They earn £326 a month on average, although four out of 10 say they do it for fulfilment rather than cash.
Nici Audhlam-Gardiner, managing director of lifetime mortgages at OneFamily, which produced the research for the Sunday Express, said: “Many are not motivated by financial gain but a desire to live out their goals and ambitions.”
The growth in side hustles is just one example of the new trend for flexible retirement.
Many turn their skills or hobbies into cash on the side, doing odd jobs such as accountancy, DIY and hairdressing, baking and selling cakes, or selling arts and crafts through eBay or at car boot sales.
Under tax laws introduced last April, home traders can sell up to £1,000 of items a year without paying tax on their profits.
Separate research shows the number of employees wanting to stay in work has more than doubled in three years, from 17 to 36 per cent.
Many enjoy the social interaction and get satisfaction from their job, but others fear their pension is insufficient or could run out in later life.
Paul Avis, marketing director of Canada Life Group Insurance, said employers must support changing attitudes to working.
“Older workers value employee benefits packages with products such as income protection and critical illness cover in the event of ill-health,” he said.
One in four believe they will still be working at age 70, according to insurer Aegon. This makes sense as men aged 70 are expected to live for another 15 years, and 17 years for women of the same age.
However pensions director Steven Cameron said this is only possible if you remain in good health.
Almost half of people believe they will still be fit enough to work on, but he said you need a fall-back plan should your health deteriorate: “You should also be saving in a pension as well.”
Pension freedom reforms have encouraged one in five over-50s to change their retirement plans, after taking advantage of the ability to access their pot from age 55.
Most people who access their pensions do so before state pension age, with some retiring up to four years earlier as a result.
Andrew Tully, pensions technical director at Retirement Advantage, warned against viewing your 55th birthday as a starting signal to raid your pension.
He said: “Pension freedom ‘demob fever’ could deplete your retirement pot too soon.”
WORK IT OUT
It can be difficult to calculate how much pension you need because nobody knows for sure how long they will live.
Scientists at Yale University have just developed a blood test that does just that, but many will be reluctant to take it.
Who wants to start the clock ticking on their demise?
Three-quarters do not know how much money they need in retirement but Sarah Coles, personal finance analyst at Hargreaves Lansdown, said you can get a rough idea by doing some simple sums.
“If you plan to buy an annuity, work out how much income you need to cover your essentials and other spending, then use a free online calculator to work out how large a lump sum you need to generate that,” she said.
Those planning to use drawdown should ideally only take 3.5 per cent of their pot each year, the “natural yield” from income and dividends without dipping into the capital.
However, with £100,000 yielding just £3,500 a year, many will have no choice but to carry on working, if they are fit enough.