Can I retire and still work in the UK?

Last Updated: 1 June 2026

Reviewed by: Daniel Boden, Chartered Independent Financial Planner, Abode Financial Planning, an FCA authorised firm based in Cirencester.

At a glance

Yes, you can usually retire and still work in the UK. There is no default retirement age in most jobs, and you can keep working past State Pension age.
Pension drawdown and employment can work well together, but taxable withdrawals are added to your other income for tax.
If you take taxable money from a defined contribution pension, the Money Purchase Annual Allowance can reduce future pension saving with tax relief to £10,000 a year.
You can often still make pension contributions after retirement if you are under 75, but the rules depend on your earnings and whether the MPAA has been triggered.
The full new State Pension is £241.30 a week in 2026/27, and it is taxable even though it is paid without tax being deducted first.

Working after retirement: pensions, tax and part-time consultancy

Retirement is no longer a clean break for many people. Around Cirencester and across the Cotswolds, we often meet business owners and senior professionals who do not want the old ‘stop on Friday, disappear by Monday’ version of retirement. They want more freedom, fewer days, and work that feels optional rather than all consuming.

So, can I retire and still work in the UK?

In most cases, yes. You can usually work for as long as you want, including after State Pension age, and the old default retirement age no longer applies in most roles.

State Pension age is also not the same thing as your retirement date, or the age you can usually access a private pension. GOV.UK. That distinction matters. Plenty of people now “retire” by reducing hours, stepping out of management, or switching to part-time consultancy. In practice, phased retirement planning in the UK is often less about permission and more about getting the tax, pension and cashflow pieces to line up properly.

Pension drawdown and employment: where tax catches people out

If you have a defined contribution pension, drawdown can be a very useful tool. It lets you take up to 25% as tax-free cash, within your lump sum allowance, while leaving the rest invested and drawing taxable income only when needed. That flexibility is why drawdown often suits part-time workers and consultants better than an all-or-nothing retirement. MaPS

The catch is that salary, consultancy income, State Pension and taxable drawdown all stack together for tax.

For 2026/27, the standard Personal Allowance is £12,570. In England, Wales and Northern Ireland, basic-rate tax applies up to £37,700 above that allowance, with higher and additional rate tax above that band. State Pension is taxable too, even though it is paid gross. GOV.UK

That is where people can get an unpleasant surprise. A pension withdrawal that looks small in isolation can still push more of your total income into higher-rate tax if you are also earning from work.

Consulting after selling a business: one of the biggest grey areas

This is a very common real-life scenario. You sell the business, want more freedom, but you are not quite ready to disappear. So you stay involved one or two days a week, perhaps have an earn-out period to support the handover, keep client relationships warm or advise the new owners.

Commercially, that can make perfect sense. Tax-wise, it needs more care than many people expect.

If you provide services through your own company, the off-payroll working rules, often called IR35, may apply. HMRC says the rules are there to make sure someone working like an employee pays broadly the same Income Tax and National Insurance as an employee would. In most cases, the client decides status for medium and large private-sector businesses. For small private-sector clients, the intermediary is usually responsible for deciding whether the rules apply. GOV.UK

There is a second consideration for directors. HMRC’s manuals make clear that a company director holds an office, and earnings from a directorship are generally treated as employment income and subject to Class 1 National Insurance. In plain English, if you stay on as a director, do not assume the income will be taxed like ordinary freelance work.

That is why “consulting after selling a business” needs to be planned properly. The sale proceeds are one thing. Future fees for future work are another. Blurring the two can create avoidable tax problems.

State Pension and working: what actually changes?

You can claim the State Pension and keep working. Your earnings do not reduce your State Pension, but the pension itself is taxable. The full new State Pension is £241.30 a week / £12,547 a year in 2026/27, although your own figure may be lower or higher depending on your National Insurance record. The current legislated timetable is for State Pension age to rise from 66 to 67 between 2026 and 2028. GOV.UK

National Insurance is where later-life work can become more attractive. If you are an employee, you usually stop paying National Insurance once you reach State Pension age, although your employer still pays employer contributions.

If you are self-employed, you stop paying Class 4 from 6 April after reaching State Pension age. GOV.UK

That can make part-time consultancy more efficient than people expect. It does not remove income tax, but it can improve net income compared with the years just before State Pension age.

A quick comparison

Scenario	Main tax point	Main pension point
Part-time employee	PAYE applies; employee NI usually stops at State Pension age, but employer NI still applies.	Above State Pension age, you may still have the right to opt in or join a workplace pension, depending on earnings.
Self-employed consultant	Income tax applies through Self Assessment; Class 4 NI usually stops from the following 6 April.	Personal contributions may still attract tax relief if under 75 and within the rules.
Using pension drawdown alongside work	Taxable drawdown is added to salary, consultancy income and State Pension for tax.	Taking taxable income may trigger the MPAA; taking only tax-free cash usually does not.

What good, phased retirement planning looks like

The best plans are usually simple on the surface and thoughtful underneath.

Before taking taxable pension income, it is worth mapping the next two tax years, not just this one. If you are still earning, ask whether you need taxable drawdown now, or whether salary, cash reserves and tax-free cash would cover the gapbetter.

If consultancy is part of the plan, be clear about the structure from day one. Employee, sole trader, limited company and director all have different tax consequences. And if you still want to make pension contributions after retirement, make sure you understand the MPAA before you touch the taxable part of a pension.

Thinking about retiring, but not ready to stop?

For many of our clients in Cirencester and across the Cotswolds, the question is not whether they can work after retirement, it’s how to do it without unnecessary tax, lost pension allowances, or unintended consequences.

The decisions around pension drawdown, consultancy income and timing can have a lasting impact. Get them right, and you gain flexibility and control. Get them wrong, and it can quietly cost you thousands in tax or restrict your future options.

At Abode Financial Planning, we help you map this out properly:

When (and how) to take pension income without triggering the MPAA too early
Ensure your pension pots are all ‘retire-ready’
How to structure part-time work or consultancy after a business sale
How to balance earnings, State Pension and investments tax efficiently
How to build a phased retirement plan that actually fits your life

If you are approaching this stage and want clarity before making any decisions, we are here to help.

Book an initial conversation with us, no pressure, just a clear plan for what comes next.

Frequently asked questions

Yes. In most jobs, you can usually keep working after retirement and after State Pension age.

Yes, but taxable drawdown is added to your other income for tax.

Often yes, especially if you are under 75 and still have relevant UK earnings.

Usually not as an employee, although employers still pay employer NI. Self-employed people normally stop paying Class 4 from the following 6 April.

Planning your next chapter

If you are in Cirencester or the wider Cotswolds and thinking about retiring but still working, this is worth getting right before you take taxable pension income or sign a consultancy agreement. A good plan can help you keep flexibility, avoid unnecessary tax and make work fit around life, not the other way round.

Why trust Abode Financial Planning in Cirencester?

Abode Financial Planning specialises in pension advice and retirement planning and works with business owners, professionals and retirees who want joined up, holistic financial advice rather than product sales. Daniel Boden is a Chartered Independent Financial Planner, and Abode Financial Planning is authorised and regulated by the Financial Conduct Authority.

Important: This article is for general information only and does not constitute personal advice. Pension and tax rules can change, and the right approach depends on your own circumstances. Check your State Pension forecast and take personalised advice before acting.