LV= has revealed that 87% of people working aged 65 and over are happy to be in employment, with 40% working out of choice and only 11% feeling obliged to work because they need the money.

The insurer says this is in stark contrast to three years ago when 26% of people at retirement age were unhappy to still be working.

The study also found people are now choosing to phase their retirement, with 14% approaching retirement age opting for semi-retirement, and gradually reducing their hours, rather than retiring straight from full time work.

The research is part of LV=’s annual State of Retirement study, which outlines the typical financial situations for retirees, before and at retirement age. The second chapter looks specifically at ‘grey collar workers’, those pensioners working into their retirement, either through necessity or a desire to stay active. The full report will be released in the summer.

LV= also found 55% of those approaching retirement are concerned they won’t have enough saved and a similar percentage (56%) think they’ll need to find income from other sources.

John Perks, managing director of retirement solutions at LV=, said: “Many people are staying active and remaining at work because they want to, but with large numbers approaching retirement worried they won’t have enough saved, there is a risk that the next generation of ‘grey collar workers’ will have to work out of necessity.

“The pension freedoms have given older workers more flexibility to choose the type of retirement they want, and how they fund it, but with more choices than ever before it’s important to plan both before and at retirement. People approaching retirement need access to affordable, regulated advice to help them shop around and get more from their money, giving them the freedom to decide how long they want to keep working.”