Pension income can come from private and state schemes but these resources can only be utilised between the ages of 55 and 66. Due to economic uncertainty and financial costs, many people may not be able to retire until well into their later years but an unwanted early retirement can also be difficult.
Just Group, the retirement specialist, recently conducted a survey of 1,043 UK retired and semi-retired adults aged 55+.
The results from this research showed 48 percent of respondents who stopped working earlier than they had planned said it was an unwelcome drama.
Just Group found among retired people aged 55+ who said they had stopped working earlier than they had expected, one-third (33 percent) did so due to poor health or physical problems while 15 percent lost their job and were unable to find another.
This contrasts with just one in four who stopped working because they felt their pensions and savings were enough that they could afford to retire.
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“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.”
Stephen detailed the research has important implications for later life planning and for policymakers considering future rises in the state pension age.
He continued: “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.
“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.”
Recently, the FCA set out proposals to require pension providers to be more proactive in directing consumers to Pension Wise.
This was welcomed by Becky O’Connor, the Head of Pensions and Savings at interactive investor.
She responded to the announcement: “Pension Wise is a free, impartial service – why not use it?
“Retirement planning is not up there on the list of fun ways to spend time, so we need all the help we can get when it comes to getting it sorted.
“When it comes to pensions, sometimes it needs to be a shove rather than a gentle nudge.
“Our Great British Retirement Survey last year suggested that only 14 percent of consumers were using this service, only marginally ahead of getting advice from friends and family (11 percent). Some 36 percent of respondents said they do their own research, and 28 percent use the financial press.
“But none of this needs to be at the expense of using a free, Government backed service as well.”
On top of Pension Wise, people can seek guidance from the likes of the Money Advice Service and Citizens Advice.
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