Over 50s leaving work early could hit retirement plans…and cost the UK economy £88 billion

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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

The early exit of people aged between 50 and state pension age from the workforce has a significant impact on both individual retirement plans and the wider economy. In fact, it could be costing the UK as a whole as much as £88 billion, according to the latest ONS figures.

While in some cases stopping work early will be a voluntary decision – for example as a result of early retirement – in other situations it will be less voluntary, such as ill-health.

Worryingly, although perhaps not surprisingly, people who work in low-paying or physically intensive sectors are six times more likely to stop working before state pension age because of ill-health than those working in other professions.

What’s more, women are more likely to stop working early than men, potentially further perpetuating the gap in pensions between the sexes.

Stopping working in your 50s – when in theory your earning power and ability to save should be at its highest – could also have a significant impact people’s retirement outcomes.

In many cases it will mean making your retirement income stretch for much longer, meaning you have to live for less in your later years.

It also potentially impacts on people’s health and wellbeing. For all those reasons, supporting people in their 50s to stay in work for longer should be an absolute priority for policymakers.

These articles are for information purposes only and are not a personal recommendation or advice.


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Written by:
Tom Selby

Tom Selby is a multi-award-winning former financial journalist, specialising in pensions and retirement issues. He spent almost six years at a leading adviser trade magazine, initially as Pensions Reporter before becoming Head of News in 2014. Tom joined AJ Bell as Senior Analyst in April 2016. He has a degree in Economics from Newcastle University.


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