The retirement market changed considerably in 2022, largely driven by market volatility and soaring inflation. Your retirement plan may have been knocked off its original course and need reviewing in the light of changed circumstances.

The lessons learned about pensions in 2022 have been both surprising and sometimes alarming. For example, if you are close to the time when you draw your retirement benefits, then the performance of investment markets in 2022 has been a doubleedged sword:

• Both share and bond markets have been volatile. This has made the year an uncomfortable ride for some retirees relying on pension fund withdrawals. If you choose this option, you need to accept it comes with investment risk, so ongoing investment advice is vital.
• Annuity rates rose sharply in 2022. By midNovember the 65-year-old rate had risen by more than half since January, to just over 7.5%. The improvement in annuity rates is worth noting even if you are already making pension fund withdrawals. Now could be a good time to lock in a guaranteed lifetime income from part of your drawdown fund by buying an annuity.

Working for longer?

If retirement is some years away, recent research from the Office for National Statistics (ONS) could make you think about when you can afford to stop work. The working population aged 65 and over has rapidly recovered from the pandemic-induced fall. About 11% of that age group are still working according to the latest ONS data. Predictably most are part time, but the hours are still considerable - averaging 21.7 hours a week.

One reason more people are working beyond age 65 is that the state pension age (SPA) has been 66 since October 2020. The SPA is due to start increasing again in just over three years, with the two-year phasing in of age 67 beginning in April 2026.