Two in five workers - 38 per cent - are forced to retire earlier than their planned retirement age according to research by Aegon.
Censuswide Research conducted in May 2016 of 2,016 individuals aged over 45 showed a number of factors such as ill health, becoming physically unable to work and redundancy all have the effect of limiting planned pension contributions.
This can have serious consequences on the value of a person's pension pot.
Only 51 per cent of people retired at the age they expected, despite the face that for more and more people, retirement means opting for a gradual transition from full time work into full retirement, with many choosing to work part time for a number of years.
Aegon's research coincides with the UK's chief medical officer, Dame Sally Davies, encouraging individuals to remain in work beyond traditional retirement ages, but shows not everyone has this choice.
The findings also have important implications for the review of state pension ages John Cridland is currently undertaking for the government.
People in the UK currently hope to retire to some degree at age 64, according to a study by Watermelon Research from a sample of 3,890 UK National representative people in February and March this year.
However, this needs to be considered against a backdrop of increasing state pension age for future retirees, and means many will need additional income until their state pension kicks in.
In November this year, an argument for the current state pension to be scrapped and replaced with a "workplace Isa" and an alternative state pension exclusively for the over-80s, was put forward by the Centre for Policy Studies' Michael Johnson.
However, earlier this year, former pensions minister Ros Altmann warned against continually increasing the state pension age, urging the government to a consider a different "mechanism" for allocating state pension payments.
Steven Cameron, pensions director at Aegon said with the concept of a fixed retirement date fast disappearing, people no longer excitedly count down the days until they receive their gold watch or carriage clock.
He said: "Indeed, an increasing number relish the opportunity to stay actively in work. The changing nature of work, attitudes towards retirement and greater pressures on income mean there’s no set pattern to retirement any more. The decline of generous final salary pension schemes, and the upswing in pension freedoms, means there is a greater onus on individuals to put enough money aside for retirement.
"Planning is key, and advisers are well placed to make sure those forced out of work earlier, as well as the 12 per cent who retired later than anticipated, can optimise their retirement finances accordingly.
“With the likelihood of further state pension age increases, a growing proportion of people will simply be unable to stay in work until their state pension kicks in."
Mr Cameron added this is why it was crucial for the government, and the Cridland review, to allow people to access their state pension from an earlier age, for example 60, at a reduced level to make it cost-neutral.
"This would mirror the pension freedoms we now have within private pensions and reflect the changing and more varied needs of individuals in later life.”
Daren O'Brien, director at London-based Aurora Financial Solutions said: "The government introduced pension freedoms for personal pensions but increased the age for taking state benefits.
"I agree that there should be the options for some to take their state benefits early.”
ruth.gillbe@ft.com
