Covid pandemic pushes more than 154,000 55-64 year olds into early retirement

  • Redundancies, wage cuts and rethinking priorities make many take early retirement
  • 4% (211,000) 55-64yr olds say job loss or reduced income has led to them accessing pensions savings to supplement income

Research from pensions and retirement specialist LV= highlights how the coronavirus pandemic is disrupting the UK’s retirement plans.

The LV= Wealth and Wellbeing Monitor* - a quarterly survey 4,000 UK consumers – indicates that more than 154,000** people aged 55-64 have opted for early retirement because of redundancy and reduced income, a desire to reduce their risk of exposure to covid or the pandemic has made them reassess their priorities in life.

Figures from the Office of National Statistics indicate unemployment among people aged over 50 has been rising sharply since the start of coronavirus pandemic. 

Clive Bolton, Managing Director of Savings and Retirement at LV=, said: 

“Early retirement is a dream for many people but it can become a financial nightmare if it is forced on people without them having time to prepare.”

The LV= survey reveals people are unprepared for retirement and that retiring five years early can significantly reduce an income in retirement.(See worked example)

The LV= research (among those who were still working at the start of 2020) reveals:

  • 3% (154,000) of those aged 55-64 have taken early retirement due to Covid
  • 6% (313,000) of those aged 55-64 say they will retire later than planned to save more  for retirement
  • 4% (211,000) people aged 55-64 have accessed some of their pensions savings to supplement their income because they have been made redundant or their earnings are reduced

Unprepared for retirement

The research highlights how unprepared people are for retirement. Only a small proportion have looked at their pension value in the last year or researched how much they need to enjoy the retirement they want.

The LV= research of UK non-retired adults reveals:

  • 86% (32m) of UK non-retired adults have not checked the value of their pensions in the past year
  • Amongst those planning to retire in the next five years, 75% have not looked at their pension value in the last year
  • 59% (22m) are not confident they will have saved enough for a comfortable retirement
  • One in three (34%) who are planning to retire in the next five years are not confident they will have saved enough for a comfortable retirement
  • One in ten (11%) non-retired adults believe they will never be able to afford to retire

Clive Bolton, Managing Director of Savings and Retirement at LV=, said:

“Early retirement is attractive for many people – but it can become a financial nightmare if it is forced on people without any planning because of redundancy or illness. 

“Your 50s are critical years for retirement planning because that is the age when many people’s earnings and pension contributions peak. Being forced to end a career before you planned will disrupt retirement plans. Many will opt for early retirement and accept a lower income in retirement while others will switch to lower paid work and delay their retirement.

“Early retirement is expensive. Stopping work five years early means five years’ fewer contributions into a pension, five years’ fewer compounding of returns on your retirement fund and an additional five years withdrawing money from your pension.

“People who want to retire early and enjoy the retirement lifestyle they want need to do three things: review, plan and save.  They need to check how much they have saved, plan when they want to retire and save enough to enjoy a comfortable retirement.

“It is a complicated financial decision and people considering it need to do a lot of planning and research so that they understand the pros and cons. (See tips below). Consulting a qualified financial adviser will help you develop a sustainable retirement plan while referring to the Money Helper will help people understand their options.

“Retirement can last a long time, maybe 35 years or longer, so it is important to think ahead to fund the lifestyle you want without running out of money or incurring unnecessary tax bills.

“Younger people with many years to retirement should make sure they join their employer’s pension scheme and save as much as they can. Older people should review how much their pensions are worth, how much they need to enjoy a secure retirement and what they need to do to enjoy the retirement they want.”

What people considering early retirement could do: 

  • Check the age at which you can get your State Pension and how much you’ll get. The full new State Pension is £175.20 per week.
  • Calculate the pension income you will need for your essential day-to-day spending in retirement.
  • Once you have done the above, you can then work out if you will have the amount you need in your pension by your desired retirement age. 
  • Consider increasing your pension contributions. The tax advantages of pensions make them one of the best ways to save for retirement. Tax relief means it costs £80 to have £100 go into your pension, or a cost of £60 for £100 of pension savings if you are a higher rate tax payer. If you are unsure how to do this speak to your employer or financial adviser.
  • If you are made redundant near retirement age, consider diverting redundancy payments into a pension. It can be a tax-efficient way to boost your retirement funds.
  • For more information on early retirement, visit Money Helper.
  • Seeking financial advice from a qualified financial adviser can help you work out how best to achieve your early retirement goals. If you don’t already have an adviser, you can find one using

How retiring five years early can affect your retirement income

Pensioner aged 60 is planning to retire at 65. He earns £45,000pa, his pension fund is worth £250,000 and his total pension contributions are 10%.

By 65 his fund size would have grown to £329,000 and he could have drawn an income of £18,700 per year to last over 30 years till he was 95.

But at 60 he is made redundant and decided to retire. His fund needs to last 35 years until 95.To ensure his fund lasts he will have to reduce pension drawdown by £5,500 a year to £13,200 a year.

Example assumes: Pensioner dies at age 95. Net fund growth is 4%pa. No tax or inflation assumed on income. He draws down £13,200pa from age 60.

Notes to Editors

*LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in December 2020.

**ONS data indicates 12.2% (6.4 million) of UK pop are 55-64. Some 75% (4m) in our survey said they were still working at the start of the year and 3% (154,000) of these retired early


For further information please contact:

David Gwyer
Media Relations Manager – Life & Pensions
07798 796907
Candice South
Press Officer - Life & Pensions
07867 141547

About LV=

LV= is a leading financial mutual and serves over 1.3 million members with a range of financial products. When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products. We offer our services direct to consumers, as well as through IFAs. 

LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Financial Services Limited and LV= and LV= Liverpool Victoria are trading styles of the Liverpool Victoria group of companies. Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237 is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, register number 110035. Registered address: County Gates, Bournemouth, BH1 2NF.