Just one in five retirees who stopped work early were in a financial position to do so, according to new research from Just Group, showing the importance of structured retirement planning.
A study among 55-74 year olds by Just Group found that of those who retired earlier than expected, just 17% said it was because their pensions and savings were sufficient. A further 3% said they had received an inheritance that made retiring affordable, while 2% said their partner’s income was enough to allow them to stop working.
In contrast, twice as many retirees (40%) blamed health or physical problems for their decision to quit work, while 18% had been made redundant or lost a job. Nearly one in 10 (8%) retired to help care for a family member.
Just Group’s communication director Stephen Lowe (pictured) said the figures showed that early retirement may be more of a “drama than a dream.”
He said: “Many more people retire due to circumstances outside their control than because their finances are sufficient to give up work.”
According to Lowe, the results have important implications not only for financial planning, but also for policymakers considering future rises in the State Pension Age assuming people will be able to work for longer.
Lowe continued: “Most of us have an idea when and how we would like to retire but we need to have a plan B in place in case things do not turn out as we expect.”
Just over half (51%) of those surveyed by Just Group admitted they had retired earlier than they had expected, while a third (34%) said they retired when expected with the remainder (15%) retiring later than planned.
The figures also revealed that women were slightly less likely than men to have retired early, but of those that did, over two thirds (68%) said it was to health, redundancy or to provide care for a family member compared to 59% of men. Only 18% of women retired early because they could afford it.
“For many people forced out of work early, it will be important to fill the financial gap until State Pension kicks in. Our research into benefits take up by homeowners reveals far too many don’t claim the money they are eligible to receive,” Lowe added.