Research by Canada Life shows people plan to start accessing their private pensions before they retire, with younger people anticipating this will happen sooner than those who are older.
The average UK worker plans to begin accessing their private pensions before retiring from work and state pension age, according to new research.
The study by Canada Life finds that on average people plan to access their private pension at age 62, retire two years later at age 64 and expect to receive their state pension from age 67.
The research also suggests that adults under 55 thinking about retirement might be too ambitious in terms of achieving their financial goals as they plan to retire at age 63, having accessed their private pensions at 62.
However, those who have already celebrated their 55th birthday are waiting until they are 63 to access their savings and not retiring from work until age 67, four years later than the younger age group.
Andrew Tully, technical director at Canada Life, said : “Working till you drop clearly doesn’t appeal to the average UK worker who has plans to slow down in their early 60s, typically retiring from work three years before their expected state pension age. This ambition is helped by an expectation that they will begin to access their private pensions before they retire, at age 62. This creates a clear financial planning issue and people need to take positive steps early to mind the pension’s gap. Whether that be saving more, moderating their ambitions or considering working longer.
“Product choice can also play a role as a solution which ensures flexibility, for example, a lower income while working, increasing as you move towards state pension and then dropping again can prove beneficial from a tax planning perspective.
“As people approach retirement, it’s clear from our research the financial reality kicks in. If you are looking to retire on your terms a regulated financial adviser will be best placed to help you build a plan to meet your goals.”