Most people assume they’ll work into their late 60s, not because they want to, but because they think they have to. But what if that assumption is wrong? The truth is, many people could stop working sooner than they realise. The key is knowing your number and testing the plan, not relying on guesswork or fear.
Why So Many People Delay Unnecessarily
Ask someone when they plan to retire and you’ll often hear a vague, slightly defeated “probably 67.” But that number is usually based on government retirement ages, not personal finances. It’s also shaped by outdated rules of thumb, like “you’ll need a million pounds”, which rarely match up with real-world spending habits or available income.
For many, retirement could actually start five years earlier. The problem? They’ve never run the numbers. They assume it’s not possible and keep working by default, missing out on years of freedom they’ve already earned.
How to Estimate Your ‘Freedom Figure’
So, what would it take to finish five years ahead of schedule? The answer is simpler than you think.
As a guide, the PLSA suggests a ‘moderate’ retirement lifestyle costs around £607/week for a single person or £842/week for a couple, not including rent or mortgage. A ‘comfortable’ lifestyle rises to £843 and £1,162/week respectively.
Start with your monthly spending, the lifestyle you want, not just the minimum. Multiply that by 12 to get your annual income target. Then consider what income sources you’ll have access to if you stop working early: workplace pensions, personal pensions, ISAs, savings, property income, part-time work, or even an early business exit.
Don’t forget: you don’t need to cover your entire retirement upfront, just enough to bridge the gap until your State Pension kicks in. For example, retiring at 62 instead of 67 might only mean funding an extra five years, not 30.
Also consider costs that might drop (like commuting or mortgages) and those that might rise (like healthcare or holidays). Once you have a rough idea, a financial adviser can help you test it with proper modelling, so you can see exactly what early retirement might look like, month by month.
One heads-up: your first withdrawal might be overtaxed due to emergency tax codes. Don’t panic, this can usually be reclaimed using a quick HMRC form (like P55 or P53Z).
What Happens If You Semi-Retire Instead?
Early retirement doesn’t have to mean stopping work cold turkey. Many people choose a phased exit, switching to part-time, freelancing, or even starting a lifestyle business.
This approach stretches your finances and keeps your savings growing, while giving you back time and freedom. It also smooths the psychological transition from full-time work to full-time leisure, which, for some, is just as important as the numbers.
You do need to be careful, taking flexible pension income can trigger the Money Purchase Annual Allowance (MPAA), reducing how much you can pay into pensions (currently £10,000/year).
To keep flexibility, consider taking just your tax-free lump sum or a small pot first.
With the right plan, you might not have to choose between income and independence. You can have both.
Next Step: Get Clarity, Not Guesswork
The earlier you check the numbers, the more options you’ll have. Whether you’re dreaming of long holidays, helping family, or simply slowing the pace, early retirement might be more realistic than you think.
The question isn’t just “Can I retire early?” – it’s “Could I afford to stop waiting?”
Let’s help you find out.
📞 Call 020 8366 4400
📧 Or email enquiries@cedarhfs.co.uk to book your retirement review.