Three fifths of workforce retire before state pension age

Over three in 5 (62 per cent) retirees left the workforce earlier than the state pension age of 66 years outdated, analysis by Simply Group has discovered.

Analysis from the group’s countdown to retirement survey additionally revealed {that a} fifth (19 per cent) of retired over-55s stated they retired as quickly as they began to obtain the state pension.

Moreover, the identical proportion (19 per cent) claimed they retired someday after receiving the state pension.

The analysis discovered that male retirees had been extra more likely to retirement earlier than the state pension, in comparison with their feminine counterparts.

Over a 3rd (34 per cent) of those that retired earlier than they reached state pension age stated additionally they withdrew cash from their pension between the age of 55 and ending full-time work, highlighting widespread use of pension money by many individuals but to surrender work.

Simply Group group communications director, Stephen Lowe, commented: “The vast majority of persons are retiring earlier than they attain state pension age, placing further strain on their retirement funds as a result of they have to bridge the revenue hole between stopping work and beginning to obtain the state pension.

“Unsurprisingly, our survey additionally found excessive ranges of early pension entry with almost three in 10 (28 per cent) taking cash out of their pension earlier than retiring, rising to greater than a 3rd of those that stopped working earlier than state pension age.”

This comes after knowledge from the Monetary Conduct Authority’s retirement revenue market replace raised issues concerning the sustainability of revenue withdrawals.

This confirmed that two in 5 (40 per cent) of revenue drawdown plans had been being withdrawn at an annual charge of 8 per cent or over, with 13 per cent seeing common withdrawals of 6.99 per cent.

Lowe added: “The vast majority of folks utilizing revenue drawdown methods are extracting greater than 6 per cent a 12 months, considerably increased than benchmark so-called ‘protected’ charges of nearer to 3-4 per cent exacerbating issues about how lengthy folks’s pension revenue will final.

“We might urge folks approaching the age after they can entry their pension, and people serious about after they can afford to depart the workforce to hunt assist earlier than making irreversible selections.”

This text initially appeared on our sister title, MoneyAge.