Early retirement is largely positive, says a study, with 68 percent of people saying their happiness has improved since they have left work.

The most popular age to retire is 60 – but the insurance company Aviva says it comes at a cost.

The insurance firm found that out of the people who retire early, 24 percent return to work because they end up with financial issues. 

With the state pension age currently standing at 66, Aviva’s findings show one in six (17%) people who have taken early retirement did so when they were 60.

The company says one in three people said they want to retire early mainly “to enjoy more freedom while still being physically fit and well enough to enjoy it”. 

The second most common factor prompting people to embrace retirement is financial security – more than one in four (26%) early retirees say their decision was because they could afford not to work.

One in five (20%) people plan to retire even earlier at 55, which Aviva believes is because they are able to access their pension savings from this age. 

Since the pandemic, other key factors leading people to early retirement include reassessing their priorities and what’s important to them in life or wishing to spend more time with their families. Almost 20 percent wanted to leave early because they were stressed by work and a further 20 percent wanted to leave because they were bored.


The early retirement payoff and its cost

However, Aviva’s research suggests the impacts of early retirement are wide-ranging and broadly positive in many areas of life. 

More than two in three (68%) people who have retired early say their happiness improved since leaving work. 44 percent of early retirees say their family relationships improved and 34 percent found their friendships also improved.

Meanwhile, with regards to their health and wellbeing, more than half says there has been a boost, while 50 percent say their physical wellbeing also improved.


Some early retirees return to work

Even so, nearly half of early retirees found their finances worsened as a result  of leaving early, with women most likely to have felt a negative financial impact from retiring early (50% vs. 44% of men). 

A quarter of people surveyed told the company they had to return to work because of a lack of finances, while others say they needed to go back to work to boost their mental wellbeing.

Over one in four (27%) cite the reason for returning to work is because they “wanted a new sense of purpose”, making this the most frequent driver, followed by “missing the company and social interactions with colleagues” (26%). However, a similar number (24%) of early retirees find themselves heading back to work having experienced financial issues.

Alistair McQueen, Head of Savings & Retirement at Aviva, said: “It’s also important to learn from the lesson that, while happiness soars in retirement, many people find their finances take the strain when they retire early and money worries are one of the biggest factors resulting in people returning to work. If you aspire to retire early, it’s vital you plan your finances to be sustainable for the long-term.”


Stepping stones to an early retirement

Meanwhile, one in three people who retired early (32%) said having a final salary pension helped them take retirement into their own hands, which Aviva suggests would make it difficult for younger generations to achieve.  

However, according to the firm, there are steps people can take to make an early retirement possible. 

This includes paying off one’s mortgage, saving little and often and saving extra when receiving a payrise or a bonus





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Feyaza Khan has been a journalist for more than 20 years in print and broadcast. Her special interests include neurodiversity in the workplace, tech, diversity, trauma and wellbeing.