Early retirement to disappear by 2035

Early retirement to disappear by 2035

Early retirement will disappear by 2035, as the number of people retiring before the age of 65 is decreasing, according to analysis from Aviva.

The provider is basing this estimate on employment figures published today (21 March) by the Office for National Statistics (ONS), which showed a continued decline in the number of people who define themselves as retired before the age of 65 - falling to 1.15 million.

According to Alistair McQueen, head of savings and retirement at Aviva, the number of people who retired early peaked in June 2011 at 1.6 million.

He said: "This followed years of continued increases since records began in 1993.

"Today the number has fallen, again, to 1.15 million people.

"As life expectancy at birth increases and as the state pension age rises, we can expect this trend to continue."

Life expectancy is now at 83 for women and 79 for men, according to ONS data.

In July it was decided the state pension age increase should be brought forward to 68 between 2037 and 2039, due to increases in life expectancy.

Under the current law, the state pension age is due to increase to 68 between 2044 and 2046.

The change to the state pension age will leave 7.6 million people £10,000 worse off, according to analysis by the House of Commons Library.

Mr McQueen said: "A longer working life is one of the most powerful ways of supporting our longer lives in retirement.

"Workers must be supported through this change. Employers must take action to recruit, retrain and retain this valuable older workforce.

The ONS data also shows that the number of workers aged 50 and over has reached a record of 10.1 million.

According to Paul Gibson, managing director of Granite Financial Planning, retiring early is going to be increasingly challenging as people live longer, final salary pension schemes become rarer and state pension age increases.

He said: "Many people don't necessarily retire early in any event in my experience but reduce hours or move into consultancy.

"What is totally unfair is the cap on pension contributions and a cap on benefits taken, which makes retiring early more difficult."