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Increase in early retirees, who are taking a hit on their income

3 May 2018

Nearly two thirds (60%) of those stopping work this year will do so before their state pension age or company pension retirement date, but it could hit their annual finances by over £3,000 according to a study by Prudential.

The life assurer’s annual study, Class of 2018, found those planning on retiring early could be facing a hit on their annual retirement income to the value of £3,394. The average expected retirement income for those retiring early is £18,567, compared to £21,961 for those not retiring early.

However, those opting to retire early felt the most comfortable about their financial situation, with over half (56%) stating that they feel financially well prepared. This compares to 49% among those working towards their expected retirement date.

The study found that the average age of those deciding to finish work early is 57, and over a third (37%) plan to take up a new hobby or sport, while 27% will start voluntary or charity work and 17% are planning a long-term holiday or gap year.

Vince Smith-Hughes, retirement expert, Prudential, said: “It’s encouraging to see that so many of this year’s retirees are in a comfortable enough financial position to enable them to retire early.

“People stopping work early are not planning to put their feet up. They want to keep busy and active by taking up hobbies, sports, charity work and some are even planning a post-work gap year. These are fantastic ways to spend your retirement but can be expensive and, with everyone living longer than ever before, it is vital to ensure you can fund your whole retirement.

“Seeking guidance from the Government’s free and impartial Pension Wise service or advice from a professional adviser can help people identify the best course of action to achieve their specific financial retirement goals at any stage in their working life.”

 

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