Over half (52 per cent) of over 50s in Scotland who have left the workforce since the beginning of the covid-19 pandemic took early retirement, although "huge gaps" remain in pension saving levels, research from Phoenix Insights has revealed.

The research suggested that a higher proportion of over 50s in Scotland have taken early retirement compared to the rest of the UK (49 per cent average), with only the Southwest (57 per cent), Southeast (54 per cent) and East of England (55 per cent) recording a higher proportion.

Sickness and disability were also significant drivers for over 50s leaving the workplace early in Scotland, as 19 per cent had left work since the beginning of the pandemic due to ill health or disability, slightly above the 18 per cent UK average.

The latest official figures showed that around 346,000 people aged 50-64 are currently economically inactive in Scotland, which represents the highest number since comparable records began.

However, Phoenix Insights warned that while some over 50s will have enough additional resources to meet the income requirements of early retirement, many who leave work before state pension age, particularly due to ill health or caring responsibilities, are financially vulnerable.

Indeed, analysis by the group revealed that, at current savings levels, savers could face a shortfall in retirement, as 31 per cent of adults in Scotland have no pension provision at all.

In addition to this, the group found that the average pension wealth among 50–64-year-olds in Scotland is £157,500, which is almost £100k short of what is needed for a ‘moderate’ retirement income if retiring at the state pension age.

Given this, Phoenix Insights suggested that there may also be a proportion of over 50s who have chosen to retire early, but are now looking to re-enter employment amid the cost-of-living crisis and to make up any potential gaps in savings they’ve identified.

Phoenix Insights director, Catherine Foot, stated: “Economic inactivity across the UK has remained stubbornly high since the coronavirus pandemic, with over 300,000 individuals between 50 – 64 currently out of work and not looking to return.

"Across Scotland, a majority of these individuals have taken early retirement, while others have left the workforce due to ill health, job dissatisfaction, or caring responsibilities.”

“It’s important not to dismiss economic inactivity among this group as a case of rich baby boomers choosing to enjoy time on the golf course.

"Stereotypes like this mask real financial and health vulnerability among a group whose successful return to employment is critical to the UK’s productivity and prospects for economic growth, and hugely beneficial to support people’s long-term finances.

"Around one in three people in Scotland have no pension provision at all, and at current savings rates, many will fall short of a decent standard of living in retirement.

“The UK government announced several measures to encourage over 50s back to work in the Spring Budget, but more targeted action is needed.

"To enable those in their 50s and 60s to remain in meaningful work for longer, we need to make work more accessible for a wider group of people, with greater flexibility and opportunities to recruit, retrain and retain colleagues.”

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