An IFS study shows that early retirement is increasingly reserved for the rich

  • According to the IFS report, around one in four wealthy people manages to retire early
  • They are disproportionately likely to work in their 70s – because they enjoy it
  • The poorest fifth of the population is far more likely to be too sick to work

When will you retire? More and more people are staying in work until the statutory retirement age of 66

When will you retire? More and more people are staying in work until the statutory retirement age of 66

New research shows that wealthy people are most likely to retire early and poorer workers give up for health reasons, while those in the middle class continue to work well into their 60s.

Among people nearing retirement, the employment rate of those with only average wealth has skyrocketed in recent decades.

In the early 2000s, the percentage of people aged 55 to 64 who were retired was fairly similar, regardless of how well off they were, according to the influential Institute for Fiscal Studies think tank.

However, early retirement is increasingly reserved for the wealthy, unless you are forced to give up work due to a permanent illness or disability or to be a carer.

The poorest fifth of the population is far more likely to be too sick to work; In England, 39 percent of those aged 55 to 64 are affected, compared to just 9 percent of the middle and most affluent groups.

The IFS found that the employment and retirement situation changes for people in their early 70s, with wealthy people disproportionately likely to be in paid work at this point.

“This is consistent with existing research showing that those who work past state pension age often do so because they enjoy the work or to stay active, rather than for financial reasons,” the think tank says.

“People who work over statutory retirement age are disproportionately likely to be self-employed or work fewer than 16 hours per week.”

According to the IFS, it is difficult to say whether the decline in employment rates for people just before and after the current state pension age of 66 will continue after the pandemic.

However, the report emphasizes that this recent change in direction is very small compared to longer-lasting trends from the mid-1990s that have pushed up employment rates for older men and women.

“From a policymaker’s perspective, most would likely want to see higher employment rates both before and after the statutory retirement age – this leads to higher tax revenues and reduces take-up of government financial support.”

“But it is notable that employment trends at older ages have not occurred in a way that would obviously provide relief to the state.”

This is because the largest employment gains were among middle-wealth people, rather than those with low wealth who rely most on government benefits.

Break from work: percentage of pensioners by age (Source: IFS)

Break from work: percentage of pensioners by age (Source: IFS)

The employment rate of the middle fifth of wealth increased sharply from 59 percent in 2002-03 to 76 percent in 2018-19, it said.

At that time, the employment rate in the poorest fifth was 46 percent and in the richest fifth it was 65 percent.

In 2002 and 2003, 20 percent of the poorest fifth of those ages 55 to 64, 24 percent of the middle fifth, and 28 percent of the richest fifth had retired.

From 2018 to 2019 it was 7 percent of the poorest, 14 percent of those with middle wealth and 24 percent of the richest.

The IFS analyzed figures from the English Longitudinal Study of Aging and used 2018-2019 as a cutoff point because there is no subsequent information about people’s wealth and there have been only small changes in employment trends since then.

Jonathan Cribb, deputy director of the IFS, said: “As some accumulate significant wealth in their late 50s and early 60s, they are taking advantage of the opportunity to retire early.”

“In contrast, the poorest in this age group often leave work for other reasons, particularly health, and receive state benefits for a long time.”

“One of the most notable changes of the last 20 years has been the sharp increase in the number of people of average wealth working into their mid-60s, and this is not just due to the increase in the statutory retirement age.”

“These people often don’t have the financial security to retire – many have an outstanding mortgage, for example.”

Here’s how to manage your pension if you’re worried it’s running out

1) If you are worried about whether you have saved enough, Find out about your existing pensions. Broadly speaking, you need to ask the systems the following questions.

– The current fund value.

– The current transfer value – as there may be a penalty for moving.

– Whether the pension is a final salary or defined contribution system. Defined contribution Pensions take contributions from both the employer and employee and invest them to provide a sum of money in retirement.

Unless you work in the public sector, they have now largely replaced more generous gold-plated ones defined advantage – Career Average or Final Salary – Annuities that provide a guaranteed income after retirement until your death.


Defined contribution pensions are stingier and savers bear the investment risk, not employers.

– Whether there are guarantees – for example a guaranteed pension rate – and whether you would lose these if you moved the fund.

– The pension forecast in retirement age. You can use a pension calculator to find out whether you will have enough pension. These are widely available on the internet.

2) You should add the forecast figures to your expected state pension, which is currently £203.85 a week, or around £10,600 a year if you are entitled to the full new rate. You can get a state pension forecast here.

3) If you’re tempted to combine your old pensions, read our guide first to make sure you don’t face any disadvantages.

4) If you’ve lost track of old pots, the government’s free pension search service is available.

Be careful when searching for Pension Tracing Service online as many companies with similar names will appear in the results.

They also offer to take care of your pension, but try to charge you or beat you up for other services and could be fraudulent.

Drew Weisholtz

Drew Weisholtz is a Worldtimetodays U.S. News Reporter based in Canada. His focus is on U.S. politics and the environment. He has covered climate change extensively, as well as healthcare and crime. Drew Weisholtz joined Worldtimetodays in 2023 from the Daily Express and previously worked for Chemist and Druggist and the Jewish Chronicle. He is a graduate of Cambridge University. Languages: English. You can get in touch with me by emailing:

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