LONDON: September 08, 2004 – Contrary to popular belief, recent economic hardship has not yet reversed the overall trend of the past 18 years for members of defined benefit (DB) schemes to retire early. However, analysis of more recent figures - from 2000 onwards - indicate that a gradual move towards later retirement may be starting to take place. This is according to analysis of the retirement ages of more than 100,000 members of UK DB schemes by Aon Consulting.
Aon Consulting’s analysis shows that in the past 20 years, from 1985 to 2000, the average age at which males draw their pension has fallen by around 2 years.
On average, 50% of men in corporate DB schemes began drawing their pension at or before turning 60, with this trend becoming more common over the years. Around 45% of scheme members drew their pension by age 60 in 1985 compared to almost 60% by 2003.
Although UK companies have increasingly restricted early retirement during this period, mainly due to cost pressures, Aon Consulting’s analysis shows that this has not impacted on the overall trend to draw on pension provision before reaching State Pension Age.
Paul McGlone, Principal and Actuary at Aon Consulting, said “Whilst there has been speculation that a harsher economic climate has led scheme members to delay drawing on their pensions until later in life, our analysis shows that under DB schemes, the economic climate has not had a major impact on retirement age."
McGlone added: “At present, members are still drawing their pensions earlier than they were during the 1990s. But as more companies place restrictions on their DB schemes, we are likely to see an increase in average retirement age.”
Notes to Editors:
The analysis looked at over 100,000 retirements in the past 18 years. The average pension included in this analysis in £6,000 per annum. The above charts all relate to male members. Similar patterns hold for females, but with the effects less pronounced.
About Aon Consulting
Aon Consulting is a leading human capital consultancy, helping organisations of every size to attract and keep the employees they need. We advise on all aspects of employment, including health-related insurance and risk; employee compensation and pensions; human resource strategy planning; job design and change management; and staff assessment and legal issues.
Aon Consulting is a division of Aon, the UK’s largest insurance broker and provider of risk management services, a major force in reinsurance and the UK human capital consulting market.
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