For a growing number of us, retirement is looking further away than ever. Most people in the UK now expect to have to continue working beyond retirement age, according to a report by Chums.
On top of the cost of living squeeze, the UK already has by far the lowest state pension deal in Europe. So many more of us are going to have to find additional ways of supplementing our pension settlement.
And while Gen Xers in their 50s remain confident that they have the skills, abilities and appearance to remain competitive in the jobs market, recent reports state that half of HR managers actively discriminate against job seekers in this age group.
Not surprisingly the over-50s are the fastest-growing group of the self-employed and are making the most of their dynamism by starting their own business. But while this is a great option for some, many others earn less than they would in employment. Nevertheless, if you already have some retirement income a side hustle could be just the thing to top it up.
Whether through employment, investing, or utilizing assets, there are several avenues to explore for additional income. Here are some practical suggestions:
1. Part-Time or Flexible Work
Many retirees opt for part-time work to supplement their pension. This not only provides additional income but also keeps them engaged and socially active. Popular options include:
- Freelancing or Consulting: Retired professionals can leverage their expertise to offer freelance services or consulting in their former industries. Websites like Upwork, PeoplePerHour, and LinkedIn can help connect retirees with freelance opportunities.
- Retail or Hospitality Jobs: Part-time positions in retail or hospitality can provide a steady income and often come with flexible hours.
- Seasonal or Temporary Work: Many industries, such as retail and tourism, offer seasonal work, which can be ideal for retirees who want to work only during certain times of the year.
- Teaching or Tutoring: Those with academic or teaching backgrounds can provide tutoring services in their subject of expertise. Many retirees are turning to platforms like Tutorful or local community centers to teach children or adults.
2. Monetize Hobbies or Skills
Turning a hobby or skill into a small business or freelance opportunity can be both enjoyable and profitable.
- Handmade Crafts and Artwork: Sell handmade crafts, knitted items, or artwork on platforms like Etsy or at local craft fairs.
- Gardening Services: If you have a green thumb, consider offering gardening or landscaping services. Many people seek help with maintaining their gardens.
- Baking or Catering: If you enjoy cooking or baking, you can sell homemade goods locally or offer small-scale catering services for events.
- Photography or Art Classes: Those skilled in photography or painting can offer classes or workshops, either in person or online.
3. Renting Out Property or Space
Property is one of the most valuable assets retirees may have, and there are multiple ways to generate income from it.
- Rent a Room: Retirees with extra space can consider renting out a room through platforms like Airbnb or SpareRoom. The UK government’s “Rent a Room Scheme” allows up to £7,500 a year tax-free.
- Holiday Letting: If you have a second property or a suitable space, you can consider short-term holiday letting. This option can provide higher returns compared to traditional renting, especially in tourist areas.
- Garage or Parking Space Rental: Renting out an unused garage or parking space, particularly in urban areas, can generate additional income without too much hassle.
4. Investments and Savings
Making the most of existing savings and investments can help supplement pension income.
- Dividends and Interest Income: Consider investing in dividend-yielding stocks, bonds, or mutual funds to generate a steady income stream. It’s important to seek financial advice to balance risk and return.
- Buy-to-Let Property: If you have the capital, investing in a buy-to-let property can provide rental income. This requires careful consideration of location, property management, and market trends.
- Peer-to-Peer Lending: Platforms like Ratesetter and Zopa offer opportunities for peer-to-peer lending, where you can earn interest on loans made to individuals or small businesses. As with any investment, it’s essential to understand the risks.
5. Downsizing and Relocation
For some retirees, downsizing their home can free up capital and reduce costs, effectively increasing disposable income.
- Sell and Downsize: Selling a larger home and moving to a smaller property can release capital that can be used to generate income through investments.
- Equity Release Schemes: Equity release allows retirees to access some of the value tied up in their home, either through a lump sum or regular payments. It’s crucial to seek professional advice to fully understand the long-term implications of equity release.
6. Pension Maximization Strategies
Consider strategies to make the most of your existing pension arrangements.
- Deferred State Pension: Delaying the state pension can result in a higher weekly payment when you do decide to start receiving it. This strategy can provide a guaranteed increase in income for life.
- Annuities: If you have a private pension pot, consider purchasing an annuity. Annuities provide a guaranteed income for life or for a specified period, offering certainty and stability in retirement.
7. Volunteering with Benefits
While volunteering itself doesn’t directly provide income, some volunteer roles come with perks, such as free or discounted meals, travel reimbursement, or the opportunity to gain new skills that could later be monetized.
8. Consider Government Support and Benefits
Ensure that all government benefits and supports are being claimed:
- Attendance Allowance: This benefit helps with extra costs if you have a disability severe enough that you need someone to help look after you.
- Council Tax Reduction: Pensioners on low incomes may be eligible for a reduction in their council tax.
- Help with Health Costs: The NHS offers free or discounted prescriptions, eye tests, and dental treatment to those over a certain age or on a low income.
9. Joining Market Research Panels or Paid Surveys
Participating in market research, focus groups, or completing online surveys can be a low-effort way to earn some extra cash. Websites like Prolific, Swagbucks, and YouGov offer paid surveys, while market research companies may look for participants for in-person or online focus groups.
10. Consider Pet or House Sitting
Pet sitting or house sitting can provide a way to earn money while also enjoying a change of environment. Websites like TrustedHousesitters or local pet-sitting services can be a good place to start.
By exploring these options, retirees can find ways to supplement their pension income, increase their financial security, and maintain a comfortable standard of living in retirement.