DWP Report: Now We’re Retiring Younger Than Ever Before
We may all be living longer than ever before, but despite that, it’s been revealed that workers are now retiring at a younger age than they were in 1950.
Back then, men typically retired aged 67, while women chose to retire at around 63 years old. Almost 60 years later, and we’re seeing those figure scale back.
For women, the difference isn’t very much – current retirees are still leaving work at the age of 63, but retiring just a few months earlier than their 1950s counterparts.
Men, on the other hand, are no longer working to the age of 67; they’re retiring a full two years earlier, at 65 years old.
The findings, from the Department of Work and Pensions (DWP), fly in the face of the warnings from industry experts who tell us that, as we live longer and are generally healthier (thanks medical science!) we should expect to work longer before retiring.
Tom Selby, a senior analyst at pension provider AJ Bell said:
‘The rise in average retirement ages is only going to accelerate in the decades to come as the state pension age increases further and the number of people retiring with generous defined benefit entitlements falls away. We will also see more people working longer, either full-time or part-time, in order to supplement their retirement income. For some this won’t be a problem, but for those in more strenuous or physically demanding roles the thought of retiring later will be difficult to stomach. But the stark reality is that, if life expectancy keeps going up, many will be staring a retirement age of 70 or older square in the face.’
Indeed, despite the figures suggesting we’re retiring at a younger age than ever before, successive UK governments have continued to raise the pension age – the age we must reach before becoming eligible to claim our state pension.
Faced with a ‘pensions blackhole’, the government is wary of the fact that, as we live longer, they’re going to have to pay out more over a longer period of time. In July, the current government brought forward plans to increase the age limit to 68 between 2037 and 2039, rather than the original plan to phase in the increase by 2044.
Discussing the current state of retirement, Nathan Long, a senior pension analyst with financial service company Hargreaves Lansdown, believes that the figures from the DWP showing a lowering in retirement ages fail to provide a complete picture.
‘Retirement is hugely personal and this data does not show the wide dispersion in ages of people leaving the workforce. There is some clustering to state pension age, but overall there are a wide range of factors that influence when someone stops working.’
So, while it may appear to be good news that we’re retiring earlier, don’t pop the champagne just yet. The issue is far more complex than these simplified figures show us.
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