Nearly two-thirds of workers retire before reaching State Pension Age - IFA Magazine

Around 62% of individuals who retired did so before reaching the State Pension Age.

More than a third, specifically 34%, of individuals utilized their pension funds before reaching retirement age. This raises worries about the long-term viability of pension savings.

A study conducted by Just Group, a retirement specialist, called the Countdown to Retirement survey1, found that around 66% of individuals aged 55 and over retired prior to reaching the State Pension Age, which is currently set at 66 years old.

Over 60% (62%) of the 1,050 individuals surveyed who are over the age of 55 and have retired, left their jobs prior to receiving their State Pension. 19% of the respondents mentioned that they retired as soon as they became eligible for the State Pension while an equal percentage of participants (19%) reported that they retired after receiving their State Pension.

A larger proportion of male retirees (69%) than female retirees (55%) preferred to retire before receiving their State Pension.

More than a third (34%) of people who retired before they were eligible for State Pension revealed that they had also accessed their pension funds between the age of 55 and their retirement, which shows that many individuals who are still employed are utilizing their pension savings.

At the same time, the Retirement Income market update2 released by the FCA provided information that sparked worries about the ability to sustain income withdrawals. According to the report, 40% of income drawdown plans were being withdrawn at an annual rate of 8% or higher, and 13% of them saw regular withdrawals ranging from 6% to 7.99%.

In response to the study, Stephen Lowe, who holds the position of the group's communications director for retirement services at Just Group, gave his opinion. He expressed that most individuals retire prior to attaining the State Pension Age. This fact exacerbates their financial situation during retirement because they have to fill the gap between quitting their jobs and gaining access to State Pension.

As expected, our investigation also unveiled a significant amount of individuals accessing their pension funds earlier than anticipated, with almost 30% withdrawing money from their pension before reaching retirement age. This number increased to over 33% among those who left their jobs before they could receive their State Pension benefits.

Most folks who employ income drawdown methods are withdrawing over 6% yearly, which is way higher than the supposedly secure rates of around 3-4%. This makes many worry about how long their retirement earnings will sustain them.

We encourage individuals who are nearing the age where they can utilize their pension fund, and those who are contemplating when they can retire from their employment to seek assistance prior to finalizing any irrevocable resolutions.

While getting assistance from a professional financial consultant is still highly regarded, scheduling a meeting with Pension Wise, a government-supported guidance service that is unbiased and impartial, can provide individuals with valuable knowledge and insight into their choices.