Sunday, March 29, 2020

Brits Retire Earlier But Work Longer Than Europeans

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British retirement savers are more likely to access their pensions early than workers in Europe, but tend to work longer into their later years.

Research by the European Commission shows the average British worker starts drawing a pension when they are 58 years old – but one in five are still working until they are 70.

Workers in many European Union countries wait until they are into their 60s to draw from their pensions, and as a result have a bigger nest-egg and give up work earlier than those in Britain.

The commission’s study also revealed that fewer Europeans are still in work after their 65th birthday than in Britain.

Financial experts also warn that new early-access rules that will let millions of workers take their pension cash at age 55 could mean more having to take a job after they are 65 years old.

Who retires when

“The lesson seems to be leaving a pension intact for as long as you can so you have more money to retire completely. Taking the cash early would seem to leave many having to top-up their retirement funds by continuing to work at least part time,” said a spokesman.

The commission data showed that workers in Spain do not take a pension until they are 62 and only 5% are in work beyond 65.

In Norway, workers left their pensions untouched until they were 65, but one-in-four still had a job until their late 60s.

The commission report offers retirement data, but did not ask workers why they had not given up their jobs.

Workers in some countries did take their pensions earlier than those in Britain. Pension cash was collected at an average age of 57 in Bulgaria, Poland and Slovenia.

Tax free pension cash

Only seven of the European Union’s 28 countries reported a higher proportion of workers still working in their 60s than Britain.

Retirement savers in Greece and Italy took their pension cash at the same time as the British.

In France, they wait to 59 and in Germany, until 61.

Britain’s new pension rules will let many workers take 25% of their savings tax free and either draw the rest and pay tax or leave the cash invested to provide an income.

The draft bill to change the law has just had a second reading in Parliament and is expected to become law from April 6, 2015.

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