Most reports we have seen in recent years talk about people having to work longer to support their retirement lifestyle.
But as this data from the DWP shows, people are now retiring now earlier than they did in 1950!
This is likely to be as a result of the fact that many retiring today are still likely to have some element of final salary/ defined benefit (DB) pension to support their retirement income needs. This foundation won't be available to the vast majority of those who are currently under the age of 50. These individuals are likely to have no or very little DB pension and so will need to rely on their defined contribution (DC)/ money purchase pensions and other savings.
With a DC pension, as it is essentially a big savings pot, the longer you save and the more you put into it the bigger it gets (subject to investment performance and costs). So for those with a DC pension there is an a disincentive to retiring early: if you do on the one hand you give up time to save more into the pot; and you will also have more years in retirement to fund from that pot.
So whilst it seems unusual that people today are retiring younger than in 1950, this is not a trend that is expected to continue. With more people now in DC pensions, with lower economic confidence and increasing longevity, the expectation for the future is that retirement age will rise not fall.
Workers retiring earlier than in 1950 By Kevin Peachey