More than 150,000 55 to 64-year-olds ‘pushed into early retirement by Covid-19’

More than 150,000 55 to 64-year-olds have been pushed into retiring early by the coronavirus pandemic, a report estimates.

One in 33 (3%) of 55 to 64-year-olds said they have taken early retirement due to Covid-19, the LV= wealth and wellbeing monitor found.

It said that, across the UK, the survey findings could equate to 154,000 people in this age group retiring early because of the pandemic, based on population figures.

Reasons for retiring early included redundancy and income cuts, a desire to reduce the risk of exposure to coronavirus and reassessing priorities in life due to the pandemic.

But 6% of those aged 55 to 64, potentially equating to 313,000 people across the UK, said they will retire later than planned to save more for retirement.

And 4% of 55 to 64-year-olds, potentially equating to 211,000 people, have accessed some of their pensions savings to supplement their income because they have been made redundant or their earnings have been reduced.

Clive Bolton, managing director of savings and retirement at LV= said: “Early retirement is a dream for many people but it can become a financial nightmare if it is forced on people without them having time to prepare.”

The research also found 86% of people who have not yet retired have not checked the value of their pensions in the past year.

Amongst those planning to retire in the next five years, three-quarters (75%) had not looked at their pension value in the past year.

More than half (59%) are not confident they will have saved enough for a comfortable retirement, as are a third (34%) of those planning to retire within five years.

One in 10 (11%) non-retired adults believe they will never be able to afford to retire.

Mr Bolton added: “Your 50s are critical years for retirement planning because that is the age when many people’s earnings and pension contributions peak.

“Being forced to end a career before you planned will disrupt retirement plans.

“Many will opt for early retirement and accept a lower income in retirement while others will switch to lower paid work and delay their retirement.”

He said: “Retirement can last a long time, maybe 35 years or longer, so it is important to think ahead to fund the lifestyle you want without running out of money or incurring unnecessary tax bills.

“Younger people with many years to retirement should make sure they join their employer’s pension scheme and save as much as they can.

“Older people should review how much their pensions are worth, how much they need to enjoy a secure retirement and what they need to do to enjoy the retirement they want.”

Some 4,000 people were surveyed across the UK in December.