Retire at 62 – Simple Guide to Making It Real

If you’re thinking about leaving work at 62, you’re not alone. Many UK professionals ask themselves if they have enough money, the right pension set‑up and a plan that won’t leave them short later. The good news is that with a clear cash target, smart pension moves and a few budgeting tweaks, retiring at 62 can be a solid choice.

Figure Out the Cash You Need

The first step is to know how much you’ll actually spend each year after you stop working. Grab a recent bank statement, list your regular bills – mortgage or rent, utilities, food, transport – and add a cushion for holidays, health costs and unexpected repairs. A common rule is to aim for 70‑80% of your pre‑retirement income, but the exact number depends on your lifestyle. Once you have a yearly figure, multiply it by the number of years you expect to be retired. If you plan to live to 85, that’s 23 years of expenses.

Use a simple spreadsheet or an online retirement calculator to see if your current savings and pension pot cover that amount. If there’s a shortfall, note how much you need to bridge the gap.

Boost Your Pension and Savings

In the UK, the State Pension kicks in at 66 for most people, so at 62 you’ll rely on private or workplace pensions. Check the value of any defined contribution (DC) pots you have and see if you can make extra contributions now. Even a small boost in your 30s can grow a lot thanks to compound interest.

Consider swapping a defined benefit (DB) scheme for a DC if you’re comfortable with a bit more risk – the flexibility can help you draw down funds earlier. Talk to a pension adviser about “phased retirement” options, where you take a part‑time job while tapping into your pension, smoothing the cash flow.

If you have other savings, like ISAs or investment accounts, look at the tax‑efficient ways to withdraw money. Drawing from a Stocks & Shares ISA first can keep your taxable income low, preserving more of your pension benefits.

Don’t forget to factor in inflation. A £1,000 withdrawal today won’t buy the same in ten years. Picking investments that at least keep pace with inflation – such as index funds or inflation‑linked bonds – can protect your purchasing power.

Finally, review your debt. Paying off high‑interest credit cards or personal loans before you retire frees up cash and reduces stress. If you still have a mortgage, explore whether a lump‑sum repayment makes sense or if switching to a lower‑rate remortgage could cut monthly costs.

Retiring at 62 is doable when you combine a realistic spending plan, a well‑managed pension, and disciplined savings. Start with the numbers, tweak your investments, and keep an eye on tax and inflation. With these steps, you’ll feel confident that the early exit you want is within reach.