1 in 8 Quit on Ill Health Before State Pension Age

1 in 8 Quit on Ill Health Before State Pension Age.

A report by the TUC has suggested that over 12% of workers leave their jobs before State Pension Age for ill-health reasons.

This leaves many in financial difficulty as they have had less time to build up pension rights as they are no longer working.  Indeed, there are many who not members of ‘gold plated’ defined benefit pension schemes, where at the discretion of the trustees, some receive a full ill-health, early retirement pension. Most of us are not members of such schemes.

In addition, it may leave some with shortfalls on their National Insurance Contributions and therefore State Pension entitlement further down the line.  In fact, the government is currently in consultation at present regarding state pension ages and possibly bring State Pension rights forward for those with ill-health rather the current system of means tested benefits, which ultimately, even if you only have a modest amount of savings, can then be run down quite quickly to leave you in retirement with very little pension, a smaller state pension and much depleted savings.

Comment

These claims by the TUC are not insignificant.  With an average of 1 in 8 workers retiring early due to ill-health, in pockets such as Scotland it is 1 in 7 and in Northern Ireland it is 1 in 4.  This is a huge burden on the state, not just in benefit payments but also in lost tax revenue when people are no longer working and paying taxes.

It also highlights the need, as raised in our video series last week, for us all to consider adequate income replacement, sickness and permanent health insurance.