Three in ten retired people over 55 retired before they retired, according to research by Just Group

A significant number of retirees chose to access their pension before quitting their full-time job
because they said they needed an income boost, according to new research from pension specialist Just
Group reveals.

Nearly three in ten retirees (28%) over the age of 55 said they had withdrawn money
their pension before they retired.

Nearly a third (32%) of this group said they needed the income to bridge the gap with the state pension
age or due to redundancy or lower earnings, and more than half (52%) said this was the case
retired sooner than they expected.

Stephen Lowe, group communications director at pension specialist Just Group, said: “Us
Research shows that about a third of people over 55 received pension money before they stopped working – some
because they wanted to and some because they had to.

“It appears that accessing a pension before retirement helps significant numbers of people
of people face rising daily costs of living and sudden or unexpected events such as
dismissal or ill health.

“Around 45% of those who withdrew pension funds before going to work said it was simply to collect tax money.
free cash, but a significant minority of about a third do it to supplement their income.

“Whether it is a good or bad decision to withdraw pension money before you retire depends on people
individual circumstances, but it is important to remember that pension money is withdrawn and spent
will not be available before retirement to provide income later in life.”

He encouraged those considering using pension money before retirement to get through it
difficult situation, such as dismissal or illness, to take a moment to think about whether this is really the case
best – or only – option.

A good place to start is to first see if there may be any state benefits available to provide additional benefits
income. When people decide to withdraw a lump sum from their pension, they do so
need to figure out how this can be done in the most tax-efficient way.

“In difficult times, the pension pot can seem like an easy solution to an acute problem –
but it is important that this is not the standard solution,” he said.

“People may have other options and it is important that they are fully aware of all the choices available to them and that they understand how decisions made now are likely to affect their lives in ten, twenty or thirty years’ time.

“We urge anyone considering their pension options to take advantage of the government’s
free, independent and impartial guidance service Pension Wise, which can give you a useful overview of
available options in the run-up to and upon retirement.”

There are several resources that provide information and guidance:

  • Free, impartial and independent guidance is available to retirees through the government-backed organisation
    Pension Wise – https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise
  • Organizations such as MoneyHelper and charities such as Citizens Advice and Age UK can be
    good resources.
  • Professional advisors charge fees, but in addition to information they can also provide regulated advice
    right to a benefit.