More than half of Scots retiring this year will be doing so earlier than expected, a survey shows.
Fifty-eight per cent of those planning to give up work in 2017 are doing so earlier than their projected state pension age, or company pension scheme retirement date, Prudential found.
Many are willing to take a hit on their expected retirement income in exchange for giving up the daily grind - to the tune of £1,250 a year - according to the survey of 1,000 people intending to retire in 2017.
Those who are planning to work until their retirement date expect to retire on an income worth £18,900 each year, compared with the £17,650 expected by people retiring early.
Wales is the early retirement capital of the UK, Prudential found, with nearly three-quarters (71%) of those retiring this year planning to do so early. The South East of England was found to have the lowest levels of early retirement, with 53% of those retiring there in 2017 doing so early.
But this year's early retirees feel better prepared than those who are not stopping early.
Three-fifths (60%) of those taking early retirement said they are financially well-prepared, compared with 46% of those working towards their retirement date.
Those who plan to retire early are more likely to have sought professional financial advice and more likely to have savings put by for their retirement than those who plan to wait until their retirement date, the research found.
The pension freedoms launched in 2015 have given the over-55s much more flexibility over how they access their pension cash.
Many people approaching their retirement may also be relying to some extent on "gold plated" defined benefit pension (DB) schemes, such as final salary pensions, which guarantee a certain level of income to people when they give up work.
DB pension schemes have increasingly been phased out in favour of defined contribution (DC) schemes, where the burden of risk as to how much retirement income someone ends up with is placed on the pension saver.
Experts have recently warned those aged in their 30s and younger that they may eventually face the possibility of drawing their pension for the first time in their 70s.
And with many people now getting on the housing ladder later in life, having a mortgage still to pay off may prevent some from retiring early.
Vince Smith-Hughes, a retirement expert at Prudential, said many of this year's retirees will have benefited from generous final salary schemes - something which only a "handful" of those in future generations will have.
He said: "As a result, the retirees of the future who are hoping to retire early will need to start preparing well in advance, setting aside as much as they can afford as early as they can.
"Using the really useful free guidance on offer, notably from the Pensions Advisory Service and the government's Pension Wise service, can help people understand their options. Additionally, for many people, advice from a professional financial adviser can be extremely beneficial when it comes to helping plan their retirement at any stage of their working lives, and to find out what steps to take to achieve important financial goals."
Here are the percentages of people retiring this year who will be doing so early, according to Prudential (a breakdown for Northern Ireland is not included due to a small sample size):
:: Wales, 71%
:: London, 70%
:: Yorkshire and Humberside, 67%
:: East Midlands, 63%
:: West Midlands, 59%
:: South West, 59%
:: Scotland, 58%
:: North West England, 58%
:: Eastern England, 57%
:: North East England, 56%
:: South East England, 53%
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel