Britons crave early retirement

Most don't want to work beyond 65

The majority of Britons want to retire early despite the UK pension crisis, a government survey has revealed.

On average British men want to retire at just 63, more than two years before the state pension kicks in.

But experts warn that Britons are living in a never-never land as most are not saving enough to retire early.

In fact the vast majority of workers have no idea what income they will receive in retirement from their company or personal pension scheme.

State deterrent

The Department for Work and Pensions commissioned a survey of 2,800 workers to find out when people wanted to retire and what could tempt them to work beyond the state retirement age of 65.

Many people expecting to retire early are not going to be able to afford to do so in comfort Colin Jackson, Baronworth Investments

At present, there is an estimated £27bn gap between the amount people have saved in pensions and banks and what they need to provide for a comfortable retirement.

As part of its bid to tackle the UK pension crisis the government has said that it would like to encourage workers to work on beyond age 65 and to defer taking up their state pension entitlement.

However, it seems most Britons want to give up work before they reach state pension age.

On average, men planned to retire during the 64th year and women during their 62nd year.

The study found that people who had been to University and had been employed in a management role were the most likely to want to retire early.

Pension difference

Being a member of a final salary pension scheme - which promises an income dependent on salary and length of service - does seem to impact plans to retire early.

Four out of ten members of final salary schemes said they planned early retirement.

But only one in four people who were members of money purchase or defined benefit company pension schemes - which pays a pension depending purely on investment performance - said they would be retiring before the age of 65.

Generally workers had little idea of the size of the pension pot which awaited them in retirement.

Only half occupational pension schemes members were aware what size retirement income they would receive.

Nasty shock

Alarmingly, two-thirds of people choosing to retire early had not considered the long term consequences of their decision.

Colin Jackson, director of independent financial advice firm Baronworth Investments, told BBC News Online that this was a recipe for disaster.

"Pensions are performing below peoples' expectations - if workers looking to retire early are not aware of what awaits them then they are in for a nasty shock."

"Put simply, many people expecting to retire early are not going to be able to afford to do so in comfort."