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Four out of ten plan to stay working when they retire

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Almost four out of 10 of those who are about to retire - or who have just recently done so - plan to continue working during retirement, according to a new survey by the Retirement Planning Council of Ireland (RPC).

However, while 61pc of those surveyed felt they had more to contribute to the workforce, most would not choose to remain on with their current employer if given the option, according to the RPC.

"The concept of gradual retirement is becoming more prevalent as people slowly reduce the amount of time they spend working," said Fiona Thornton, chairman of the RPC. "This trend is reflected by the 37pc of those surveyed who indicated that they plan to continue working during retirement."

The shift from defined benefit to defined contribution pension schemes is one of the reasons people plan to continue working during retirement, added Ms Thornton.

Defined benefit schemes, many of which have run into financial difficulties in recent years, traditionally 'guaranteed' to pay a pension equivalent to a percentage of a person's salary - often between half and two-thirds. However, the pension received by those in a defined contribution scheme is not guaranteed and largely depends on the amount of money paid by the person and their employer into the scheme - and how well that money is invested.

Research published by pensions consultants Mercer last week revealed that the average pension income of those with a defined contribution scheme is set to be just 22pc of their current earnings.

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