More than half (52 per cent) of over 50s in Scotland who have left the workforce since the beginning of the Covid-19 pandemic took early retirement, according to Phoenix Group.
Research by Phoenix Group’s longevity think tank, Phoenix Insights, found this figure was a higher proportion than the UK average (49 per cent).
When compared to the rest of the UK, only the South West (57 per cent), South East (54 per cent) and East of England (55 per cent) who have left the workforce since the pandemic cited early retirement as their main reason for leaving.
Sickness and disability were also significant drivers for over 50s leaving the workplace early in Scotland.
Almost one in five (19 per cent) of this group have left work since the beginning of the pandemic due to ill health or disability. This is slightly higher than the UK average (18 per cent).
Catherine Foot, director of Phoenix Insights, said: “Economic inactivity across the UK has remained stubbornly high since the coronavirus pandemic, with over 300,000 individuals between 50 to 64 currently out of work and not looking to return.
“Across Scotland, a majority of these individuals have taken early retirement, while others have left the workforce due to ill health, job dissatisfaction, or caring responsibilities.”
Foot said it is important not to dismiss economic inactivity among this group as a case of rich baby boomers choosing to enjoy time on the golf course.
“Stereotypes like this mask real financial and health vulnerability among a group whose successful return to employment is critical to the UK’s productivity and prospects for economic growth, and hugely beneficial to support people’s long-term finances,” she said.
The research found that average pension wealth among 50 to 64 year olds in Scotland is £157,500, around £100,000 less than is required for a ‘moderate’ retirement living standard.
While some over 50s will have enough additional resources to meet the income requirements of early retirement, many who leave work before state pension age – particularly due to ill health or caring responsibilities – are financially vulnerable and, at current savings levels, could be left short of money in retirement.
Some 31 per cent of adults in Scotland have no pension provision at all.
Foot said at current savings rates, many will fall short of a decent standard of living in retirement.
The research found that there may also be a proportion of over 50s who have chosen to retire early but are now looking to re-enter employment amid the cost-of-living crisis and to make up any potential gaps in savings they’ve identified.
The average pension wealth among 50 to 64 year olds in Scotland is £157,500, which is almost £100,000 short of what is needed for a ‘moderate’ retirement income if retiring at the state pension age.
For the many over 50s in Scotland retiring earlier than the state pension age, they would need to have saved even more to fund a “moderate income” in retirement.
Foot said: “The UK government announced several measures to encourage over 50s back to work in the Spring Budget, but more targeted action is needed.
“To enable those in their 50s and 60s to remain in meaningful work for longer, we need to make work more accessible for a wider group of people, with greater flexibility and opportunities to recruit, retrain and retain colleagues.”
sonia.rach@ft.com
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