'People put their heads in the sand' with retirement says expert

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The surge in premature retirements is likely to compound Britain’s worker shortage, as well as damaging incomes and the wider economy, the Office for National Statistics warned. But the number of early retirees is expected to rise again when the £70billion furlough scheme ends this week. Less than 10 percent of households are expecting to take a financial hit from retirement while 4 percent anticipate being left with more debt. Will Hale, chief executive of equity release specialists Key, which commissioned the survey, said: “Some workers reassessed their priorities and decided to stop working sooner than imagined, but others lost their jobs or were made redundant – an issue that the end of furlough will only exacerbate.

“The end of the scheme is likely to hit some people hard especially if they planned to build up savings or repay their mortgage.”

The ONS says around £88billion would be added to the UK’s gross domestic product if the employment rate of older workers matched that of people aged 35 to 49.

However, research by over-50s jobs site Rest Less found economic inactivity levels of people in that age group rose more than any other during the pandemic.

Stuart Lewis, founder of Rest Less, said many older workers were “forced into early retirement”, adding: “If we lose this generation from the workforce, ­we risk losing valuable key skills ­and key workers from the workplace for good.”

Helen Morrissey, from ­investment specialists Hargreaves Lansdown, said: “Anything that enables people to stay in work longer and benefit from increased income and pension contributions is welcome.

“Leaving the workforce early can have an enormous effect on someone’s financial resilience in retirement, as well as their physical and mental wellbeing.”

The survey found women are 3 percent more likely to retire early than men. East Midlands is the area with the most early retirements this year. The North-east has the least.

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Comment by Stuart Lewis

Economic inactivity levels have soared amongst the over 50s since the pandemic began.

There are now 516,237 more over-50s classed as economically inactive than two years ago – a large proportion of whom will be taking early retirement.

Whilst the economy is opening back up, there are still more than 350,000 over-50s who remain unemployed – a number that is only likely to increase in the run-up to Christmas after the furlough scheme closes.

While many may be looking forward to retiring before they planned to, others will feel they have limited other options apart from early retirement – but it’s a difficult choice if you’re financially and/or emotionally unprepared.

Age discrimination is sadly all too common, with many talented, experienced workers being dismissed for being overqualified – which really doesn’t make any sense at all.

Once made redundant, previous research has shown that older workers are two and a half times as likely to end up unemployed for the long-term than their younger counterparts.

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