The research among over-65s found that of those who retired before age 65, nearly six in 10 were forced out of the workplace by events outside their control such as illness (25%), redundancy (21%) or to become a carer for a family member (10%).
This compares to three in 10 who were able to choose to leave work for financial reasons, with only a quarter of those retiring early (26%) saying they had enough pension or savings to retire on, or could rely on a partner (2%) or because they had received an inheritance (2%).
“Our research shows that the early retirement dream is more likely to be a drama,” said Stephen Lowe, group communications director at Just Group. “It has important implications for anyone reaching 55 and deciding to cash in pension savings early assuming they can make up any shortfall later.
“Early access to pension cash can be useful but people need to think very carefully about whether that leaves enough to provide sufficient income for their needs in retirement. With many people’s health and professional career becoming more uncertain beyond the age of 55 it is important that they have planned for all eventualities, including that of being forced out of the workplace.”
Four in 10 (40%) of the over-65s questioned said they retired earlier than expected, on average 3.9 years earlier.
The research shows the situation was worse for women. Six in 10 (62%) women who retired early were forced to, while only one in five (20%) chose to leave for positive financial reasons. Women were about one third more likely than men to leave work due to illness and more than twice as likely to leave to care for a family member.
A third (32%) of those who retired early due to ill-health, redundancy or to care for a family member said the main impact was a lower retirement income than they had planned, with 9% saying it had stopped them doing what they wanted and 7% saying it affected their mental health. Just under half said retiring early had had no effect.
One in six (16%) said they retired later than expected, on average 3.1 years later, typically because they were enjoying working or were able to go part-time or work remotely. Fewer than a quarter of those who gave up work later than expected said they did so for financial reasons such as needing to build up more savings or pensions, or because a partner was forced out of work.
“Pension flexibility is important because it is clear that significant numbers of people end up retiring earlier or later than they perhaps were planning,” said Stephen Lowe.
“The important point is that however life unfolds, before taking pension money people should take the free and impartial guidance on offer from Pension Wise or professional advice so they understand the pros and cons.”
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