Is it time to retire early retirement?
We ask about retirement age, concerns and lifestyle in our latest consumer market research.
The state pension age is rising, and it's happening at breakneck speed. For years, the age at which you could claim your state pension benefits was 65 for men and 60 for women, but huge jumps in life expectancy have seen costs shoot up for the Treasury, which is paying some pensioners for more years in retirement than they spent paying National Insurance as workers.
Both men and women's state pension ages are currently in the process of increasing to 66, and between 2026 and 2028, they will both rise again to 67.
Some would call them 'the good old days' when employers used to be able to force workers to retire at 65 (known as the Default Retirement Age), but this law was scrapped in April 2011, following a campaign by Age UK which means that you can keep working beyond 65 if you want or need to or have to.
In 2020, more than 500,000 people will reach state pension age, according to calculations by Legal and General, based on ONS Mid Year Estimates for 2018, released in 2019. But how many of those people are looking forward to or can afford to retire?
We conducted our own survey with findings from a cross-section of our exclusive panel of consumers, OpinionHive. We asked them if retirement had come earlier or later than planned and how they now spent their free time.
30% of respondents to our survey had reached retirement age or chosen to retire in 2019 with 2% having never worked in their life – most of whom were in the 18-29 age band.
The average retirement age was 61 and 50% of people had retired between 58 and 65 years old. On average men retired at 63, three years later than women. 45% said that this was younger than the age period they had planned and 22% said that they were older than they wanted to be at retirement. 33% got it spot-on.
We asked those whose plans have changed why, and common reasoning was due to health, an injury, their job, money, a partner, grandchildren, and the Government changes in age. Others retired early following redundancy or receipt of an inheritance, or after the opportunity simply presented itself.
We asked them how they spend their time. The majority (83%) spend time at home, 56% get green-fingered with increased gardening activities, 54% spend their newfound time with friends and 50% are lucky enough to devote time to travel.
And although some would say this is hard work, 37% now look after grandchildren. 27% are taking up a new hobby and 25% are volunteering in some form.
We asked about the last job before retirement and if they would have stayed in employment had their hours been more flexible. 21% said yes and a further 15% said maybe they would have stayed on working. With an increase in flexible working, there may be an opportunity for organisations to keep experienced staff if they can accommodate the needs of workers approaching retirement.
We asked what people miss about working or having a job. Answers range from routine, colleagues, interaction, travelling, variety and money, to companionship and sense of purpose.
70% of people questioned were satisfied with their last job with only 17% feeling dissatisfied.
We asked what advice people would offer to those thinking about retirement or approaching retirement age. Taking time to plan, save and prepare financially was essential, along with making sure that you enjoy retirement. Taking up a new hobby and staying active were recommended, as was making sure that both your pension and personal health are in great shape.
Of our panel who have not reached retirement age, we asked about their plans for the future and if they have made any plans about what age they want to retire. 47% already know what age they want to retire and 15% have no plans to retire.
Both men and women plan on retiring at the same age with the majority wanting to retire between the ages of 60 and 66.
We asked about pension plans and found that only 57% of our panel have made provisions for retirement and 6% of under 30s do not know. Of those who are saving into a pension, most (35%) are saving up to 10% of their income while 6% are saving over 20%, and 12% do not know how much.
Importance of work
We asked how important working was to our panel. 78% say that it is important, compared to 1 in 6 who feel work is not important to their life.
The number one concern that people have about retirement is money, or rather the lack of it, and the ability to be able to afford to retire or live on a pension. Others are worried that they would be bored, lack support, feared illness or they fear the loss of social interaction and the onset of loneliness. Some fear getting old, the quality of their life, and being forced to move home to add to savings.
We asked if people knew how much money they were likely to have to help them be more comfortable in retirement. 70% of people have no idea, 27% feel that they know approximately and only 3% say they know precisely.
Speaking of money, we asked the panel if they know the current state pension rate to the nearest pound. Among all age groups the median estimate was within £30, with younger people both underestimating the most and having the most variance overall.
Pension Age Range
We asked if people thought that the pension age should change if the average life expectancy changes. For example, if people are living two years longer, should the pension age rise by two years? 64% of people say that they do not agree that this should correlate, and only 22% agree. While predictably younger people are the most in favour, the 70+ demographic are more likely to support this change than any group aged 40-70.
You can check your projected retirement age on this calculator from the Government here.
You can access full data, charts and statistics for surveys and FREE fact sheets in our knowledge centre.