Almost three out of 10 retirees said they withdrew money from their pension funds before moving into full-time retirement, potentially storing up financial problems for later life.
Research by Just Group found that a third of these respondents, all aged over 55, said they needed this income to bridge the gap to state pension age or as a result of redundancy or lower earnings, with more than half (52 per cent) saying that they had retired sooner than they had expected
Just Group group communications director Stephen Lowe says: “Accessing pensions before retiring from full-time work is helping significant numbers of people cope with rising day to day living costs and sudden or unexpected events such as redundancy or ill-health.
“Around 45 per cent of those withdrawing pension cash before leaving work said it was simply to take tax-free cash, but a significant minority of about a third are doing it to supplement their income.
“ Whether taking pension money before retiring is a good or bad decision depends on people’s individual circumstances, but it’s important to remember that pension money taken and spent before retirement will not be available to provide income later in life.”