Researchers have found people who want to retire at 60 will need to save a large amount to have enough income to get by before they can claim their state pension.
The state pension age is currently 66 for both men and women, but this is set to gradually increase to 67 between 2026 and 2028 and then to 68 between 2044 and 2046.
Figures from PensionBee show a couple who wanted to retire now aged 60, would need an income of £136,000 to support them in the eight years before they could claim their state pension at 68, as well as their savings for the rest of their retirement.
The group also calculated a woman retiring at 60 in a couple who want to live a moderate lifestyle, would need a combined retirement income with her partner of £476,000 for her 28 years of retirement, if she lived to the average life expectancy of 88.
If she received the full state pension from 68, she would get £212,000 of this from her state pension payments and would need to derive the remaining £264,000 from her workplace pensions and savings.
The full basic state pension is currently £156.20 a week while the full new state pension is £203.85 a week.
A person typically needs 30 years of National Insurance contributions to get the full basic state pension and 35 years of contributions to get the full new state pension.
PensionBee has launched a state pension age calculator tool to help Britons work out if they can afford to retire before they reach state pension age, which is 66.
This is also designed to help a person work out their ‘pre-state pension gap’, which is the total income they would need to maintain a minimum, moderate or comfortable lifestyle before they become eligible for their state pension.
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Another reality Britons need to consider is the healthy life expectancy for Britons is currently 63, and after this age a person may have extra costs to pay for their medical care as they become more frail and prone to illness.
Becky O’Connor, Director of Public Affairs (VP) at PensionBee, commented: “The dream of retiring early is alive.
“For many people, it is in fact necessary to give up work before they reach state pension age, due to caring responsibilities, or illness.
“As the State Pension age rises, more and more people will find they either want or need to retire before they reach it. So identifying how much extra pension would be required to do so is an important part of retirement planning.”
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A person can check how much state pension they are on track to receive using the state pension forecast tool on the Government website.
An individual with gaps in their National Insurance (NI) record can voluntarily pay contributions to potentially increase their state pension payments.
People may have gaps in their records because they have worked abroad or they did not earn enough to pay NI contributions.
People can usually pay contributions up to six years ago but at present Britons can top up their contributions up to 10 years ago.
This opportunity is only available until the end of July, after which people will only be able to pay contributions up to six years ago.
People of state pension age on low incomes may also be able to increase their income with Pension Credit, which can boost a household income by more than £3,000 a year.
The benefit tops up an individual’s weekly income to £201.05 a week for single claimants and up to £306.85 a week for couples.
Claimants can also get extra payments depending on their situation, such as if they care for another adult.
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