New research from Prudential reveals that 60% of those stopping work this year are doing so before their expected state pension age or company pension retirement date.
The annual study by Prudential, which tracks the finances and aspirations of those planning to retire during the year ahead and now in its eleventh year, also found that members of the Class of 2018 planning on retiring early could be facing a considerable hit on their annual retirement income to the value of £3,394. The average expected retirement income, inclusive of savings and state pension, for those retiring early is £18,567 compared to £21,961 for those not retiring early.
56% said they feel financially well prepared compared with 49% of those working towards their expected retirement date. That’s reflected in the numbers taking financial advice – 68% of early retirees are seeking professional advice compared with 60% of those working until their projected retirement age.
The average age of those retiring early is 57 and early retirees will be making the most of their free time – 37% plan to take up a new hobby or sport, 27% will start voluntary or charity work and 17% are planning a long-term holiday or gap year.
Vince Smith-Hughes, retirement spokesperson at Prudential, said: “It’s encouraging to see that so many of this year’s retirees are in a comfortable enough financial position to enable them to retire early.
“People stopping work early are not planning to put their feet up. They want to keep busy and active by taking up hobbies, sports, charity work and some are even planning a post-work gap year. These are fantastic ways to spend your retirement but can be expensive and, with everyone living longer than ever before, it is vital to ensure you can fund your whole retirement.
“Seeking guidance from the government’s free and impartial Pension Wise service or advice from a professional adviser can help people identify the best course of action to achieve their specific financial retirement goals at any stage in their working life.”
The East Midlands is the early retirement capital of the UK with 72% of its retirees retiring early, closely followed by Wales (69%) and Yorkshire and the Humber (67%).