Early retiree numbers fall by 7% in six months

Latest employment data released today by the government reveals that the number of people aged 16-64 who say they are retired has declined in the past six months, with 90,000 rejoining the workforce.

The figures, analysed by retirement specialist Just Group, support views that many people who retired early during the pandemic are returning to the workforce as the cost of living bites.

The number of early retirees over the past three months fell to 1.11m from 1.2m in May-Jul 2022.

Just Group says that combined with a growing cohort of defined contribution pension savers reaching retirement with often smaller pots than their defined benefit counterparts, and the expectation of longer lives, the early retirement dream may be fading for many.

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Stephen Lowe, communications director at Just Group, said: “The cost of living crisis and market volatility are likely to have contributed to driving a number of early retirees back into the workforce over the past year.”

“Those who may have felt able to retire before claiming the State Pension will have seen their household budgets squeezed as everyday items soared in cost. At the same time, many will have seen turbulence in the financial markets hit the pension savings and investments they were relying on to bridge the gap between giving up work and receiving the State Pension.

“The hard realities of how tricky it is to make a defined contribution pension last securely for a full retirement will have been brought home to many, and as defined benefit pensions disappear from the private sector this challenge will only grow for the UK’s workforce. These defined contribution pensions will also be expected to last longer as longevity nudges upwards.”

Mr Lowe said tomorrow’s Budget may bring measures designed to attract workers back to the labour market but could also include a possible acceleration in the pushing back of the State Pension Age. Any change could see UK workers faced with the “stark choice” of either working longer or working out how to fill the financial gap until they get their State Pension.

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