Covid-19 sees a surge in early retirement
The number of people taking early retirement has risen by more than ever before, says the ONS – in part because of problems in the labour market caused by Covid-19.
The number of people retiring before the age of 65 rose by more than 55,000 as the UK went into lockdown, official data reveals, suggesting that Covid-19 may be driving an increase in early retirement.
The Office for National Statistics (ONS) said that in the March to May period of this year, the number of under-65s describing themselves as “retired” was 55,311 up on November 2019 to January 2020.
The increase is the largest jump in the numbers the ONS has ever recorded. According to pension experts, the likelihood is that some savers would have left their occupations early in any case.
But many people may have been forced into early retirement unexpectedly because of problems in the labour market caused by Covid-19.
For example, older workers losing their jobs may have decided it was unlikely they would find a new role. For those planning for early retirement, the change of lifestyle may have been very welcome.
But retiring early can prove expensive, reducing the amount of time for savings to grow and requiring people to fund pension income for longer.
Research published by Prudential has suggested that people quitting the work force early face an average reduction in their annual retirement income of £3,400.