Early retirement ‘unwelcome drama’ for nearly half of early retirees forced out of work

Martin Lewis outlines pension scheme for 16-21 year olds

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Nearly half of early retirees were forced out of work by poor health or redundancy, new research from retirement specialist Just Group has found. While early retirement may be a desire for some, the survey, of 1,043 UK retired and semi-retired adults aged 55+, found for nearly half (48 percent) of people who stopped working earlier than they had planned, doing so was more of an “unwelcome drama”.

The research found that among retired people aged 55+ who said they had stopped working earlier than they expected, one-third (33 percent) did so due to poor health or physical problems.

Meanwhile, 15 percent said they had lost their job and were unable to find another.

In contrast, a quarter of those asked (25 percent) said they stopped working because they felt their pensions and savings were enough that they could afford to retire.

The main reason for eight percent of those asked was so they could provide care for a family member.

A further two percent said they gave up work due to an inheritance.

Another two percent stopped because they no longer needed the income because their partner was still working.

Stephen Lowe, group communications director at Just Group, said: “Nearly half (47 percent) of retired over-55s said they had stopped working earlier than they had expected compared to 43 percent who said they retired when they expected and nine percent who retired later.

“Going forward it will be interesting to track whether COVID-19 has forced more people out of the workforce prematurely or whether the economic insecurity has led to people putting off their retirements for longer.”

Mr Lowe went on to suggest the research has important implications for later life planning and for policymakers considering future rises in the state pension age.

“People don’t necessarily have the luxury of choosing the point they exit the labour market and many do so knowing their pensions and savings will not be sufficient,” he said.

“This reinforces the importance of using Pension Wise guidance – the free, impartial and independent Government-backed service offered to the over-50s considering how best to use their pensions – to ensure people understand their pension options but are also aware of state benefits which may help them plug a financial gap if they have to leave work earlier than expected.”

A Pension Wise appointment offers specialist pension guidance, and it should last between 45 and 60 minutes.

It can be over the phone or local to the person, Pension Wise explains.

The service explains it may be able to help if a person is aged 50 or over and has a personal or workplace pension, and they’re wanting to make sense of their options.

In the UK there is no longer a set retirement age, meaning it’s possible to work for as long as one likes.

There is a state pension age though, and this is the point when a person becomes eligible to receive the UK state pension.

In the past, the state pension age was 60 for women and 65 for men.

However, changes have meant state pension age parity between men and women has now been reached.

Furthermore, further increases have taken place, meaning some will need to wait longer than they would have done in the past to get the UK state pension.

It’s possible to check what a person’s state pension age is online via the “Check your state pension age” tool on the Government website.

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