The pros and cons of flexible retirement

Last reviewed: August 2026

When looking at flexible retirement, it is important to consider all of your options.

Is this really realistic? We take a look at our pros and cons, and the things you might need to consider when it comes to making your retirement income last.

The pros

• Flexible retirement gives you the opportunity to take things a little easier, without giving up the structure of employment.

•  You can continue earning an income, and any gap in your earnings can be enhanced by drawing on one or more of your pensions.

The cons

• You may not have enough pension savings to make flexible retirement practical.

• Drawing on your pension, especially your State Pension, the moment it becomes available could cause problems in the future. You may not be able to build enough savings from the income you’ve earned by working part-time and late in life to give yourself a good standard of living throughout retirement.

• You could end up having to work for more years than you intended, or live on an inadequate income if you reduce your hours at your normal retirement age, let alone earlier.

Making your retirement income last

So, with all of these things to consider, how do you make sure you have enough to live on throughout your retirement?

Make pension contributions as soon as you can

Many commonly used pieces of advice tend to lose their emphasis over time. The best way to ensure you have enough income in your later years is to start contributing to a private or occupational pension as soon as possible. This means you can make plenty of contributions, and it also gives your money time to grow. Plus, if you’re a member of an occupational pension scheme, your employer may be prepared to match any extra money you pay in over and above the minimum contributions required.

Pay into your pot for as long as possible

Even if you’re in your fifties, sixties or older, there are still ways you can improve your financial prospects once you retire. You may be able to continue contributing to your private and occupational pensions. There’s less time for your money to benefit from stock market growth, but your contributions will benefit from tax relief at the highest rate of tax you pay. For more information about how much you can invest visit the MoneyHelper.

Keep a record of how much you withdraw

Keep an eye on exactly how much you have taken from your pension pot and the consequences of doing so. Once you have taken taxable income from a defined contribution pension, the money purchase annual allowance applies and the amount you can pay into pensions each year with tax relief falls to £10,000. Taking only your tax-free cash does not trigger it. However, you can still take your tax-free lump of cash without triggering the £10,000 contribution limit.

Defer your State Pension

Your pension can increase significantly by deferring the benefits – by just under 5.8% for every full year you delay claiming it, under the new State Pension rules. That increase is added to your weekly payment for life, and it is taxable. Note that the State Pension age itself is rising from 66 to 67.

Get professional advice if you need it

Pensions are complex and their rules change frequently. If you’ve got any concerns or questions about investing in a pension, it’s a good idea to seek help from a professional financial adviser.

One more thing, from April 2027

From 6 April 2027, most unused pension funds count towards your estate for inheritance tax. For many people that changes which pot it makes sense to spend first. Read our full explanation, or see which retirement option might suit you.

Figures correct for the 2026/27 tax year. This article is for general information and does not constitute personal advice. The value of investments can fall as well as rise and you may get back less than you invested.

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Lee Barton (Leicester) | Ian Laker (Tamworth) | Chris Wood (Coventry)