Looking to retire early? There’s lots to think about
Home >
All >
Looking to retire early? There’s lots to think about
It is the dream of many to retire early. Indeed, 270,000 people in their 50s and 60s left the UK workforce during the pandemic, according to the Institute for Fiscal Studies.
Concerns about retirement poverty
However, two thirds of people aged 50 to 70 who quit work or lost their job during the pandemic left the workforce earlier than expected1. This means that they might not have the funds they need for a longer-than-anticipated retirement, sparking concerns that they could face poverty later in life. Of particular concern is the financial impact of accessing your pension too early, with research2 showing that doing so before reaching State Pension age could reduce your pot by 59% on average.
Compounding the issue is the fact that those who now want to re-enter the workforce are finding it difficult to get rehired. According to research from the Centre for Ageing Better, unemployed over-50s are twice as likely to be out of work for 12 months or more, than their younger counterparts.
Many factors to consider
Early retirement may be enticing, but it certainly bears thinking about. Before acting, it is always a good idea to take financial advice and think carefully about the following factors:
- Do you know how much you’ll need to live comfortably in retirement?
- If so, do you have enough in your pension pot for the lifestyle you want?
- Do you have savings or any other source of income?
- Do you still have a mortgage or any other outstanding debt you are still liable for?
- Could working for just a few more years offer you valuable financial security?
Whatever your goals for retirement, we’re here to help you get into the best possible financial position for later life.
1ONS, 2022
2Canada Life, 2022
It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.
Information is based on our understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.
Tax treatment is based on individual circumstances and may be subject to change in the future.
Other Insights of interest
16th April, 2025
Taking steps to avoid a retirement overspend
A fifth of respondents to a survey1 have consistently spent more than they expected to…
Read full insight
16th April, 2025
Family tensions over money talks – time to break the taboo
Many wealthy individuals hesitate to discuss financial planning due to fears of family disagreements, with…
Read full insight
10th April, 2025
Economic Review March 2025
Chancellor trims spending plans Rachel Reeves delivered her Spring Statement on 26 March, unveiling welfare…
Read full insight
2nd April, 2025
End of tax year IHT recap – gen up on gifting allowances
Recent HMRC data shows that IHT receipts rose to £4.3bn during the period from April…
Read full insight