Not retiring: Drawing down pensions early

There are many reasons older workers might draw down some of their pension early, but giving themselves a bit more time to enjoy life is one of them.

Group sit smiling drinking tea


The majority of older workers are drawing down pensions early, according to research by Scottish Widows. There may be very many reasons. Helping out children or grandchildren, paying for care for partners or parents or going part time or funding ‘economic inactivity’ whether for health reasons or because they are fed up with work. There’s a lot of talk about getting people to stay in work longer, but many of the people I know would dearly like to leave work early or at least cut down their hours. They don’t want to be working in stressful conditions or at the intense pace of modern working life into their late 60s.

So while pension organisations are trying to encourage people not to dip into their pensions early – and education about the impact of this is certainly important, there needs to be more focus on making work less intense or making part-time work affordable for many. The problem is only going to get worse as younger generations get older because they are increasingly less likely to be able to afford a mortgage. That means that they won’t be able to pay the mortgage off and will have to find the money for the rent into their older age.

It may be manageable in your 20s to work all hours. Maybe even in your 30s if you don’t have children. After that it becomes more tricky. What many do is to focus on efficiency savings. The longer you have done a job the quicker you can do it, but that only increases the intensity of what you are doing. That can work for a short time, but when it becomes the norm it is exhausting. And it has become the norm for many people.


While you can offset that with holiday, many people take emails with them for fear of being swamped when they get back. Somehow, there needs to be more thought put into giving people more time back to recover – whether that is the four-day week, more holiday or the ability to buy more holiday when needed, sabbaticals to do something different without having to leave work entirely…

Unpaid sabbaticals are unaffordable for many people, but maybe if they were shorter and more frequent they could work better. I remember talking to an employer who said they had introduced shorter sabbaticals for younger people with less years needed in the job to qualify. This was because their sector was a young one and few people could benefit from sabbaticals as traditionally implemented. It was part of a conversation about how benefits need to be tailored to different ages and stages.

That certainly seems the way to go – understanding what benefits would be practically of use to what groups of employees. That doesn’t necessarily mean expensive options. It just means listening to what the pressures different employees face are and thinking creatively about what would help them. They may have their own suggestions. Working together will result in better results.

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