I retired at 47 and don’t even have a pension – how you can do it too

DAVID Cox gave up the graft to spend his days at leisure when he was just 47 – nearly 20 years before the state retirement age. 
“I’d fallen out of love with my job, had a particularly bad day and thought ‘Do I really need to put up with this?'” he told The Sun.
2David Cox is a man of leisure after retiring early at just 47
2The former finance director spends his time travelling with wife Sally
But unlike many of us who’ve had enough of their job and want to quit, David managed to make it happen – despite having no pension.
“Almost within 24 hours I decided I could have a different life and that’s when early retirement as a possibility sunk in.
“It took me a few months to get comfortable with the idea and be brave enough to hand in my notice to my employer.”
“Ditching the job was seriously scary. What would I do? How much would it cost? Would we run out of money?”

David, now 54, has been enjoying his retirement since 2016, with wife Sally, 49, a retired primary school teacher.
Boosting income
After starting out on a minimum wage job at just 18, he focused on gaining financial independence in his 30s – maximising his income and minimising his outgoings.
He made the leap of leaving work entirely after his two kids, who are now grown up, left home. 
“I didn’t go to college or university and started work when I was 18 as an accounts clerk, earning minimum wage,” he says.

“I ended my career earning a high salary, but that’s not where I started – my first job had a monthly take home pay in today’s money of £876.
“But I focused on my job, finding that hard work and being dependable could convert to promotions and pay rises, and worked my way up to finance director,” he says.
“I helped it along by getting my accountancy qualification (part time study while working), taking some jobs that were a risk, and working hard to swim in a role where I could easily have given up and sunk.”
“There are different ways to grow your income, such as negotiating a pay rise, job promotion, change in employer, gaining additional skills, switching careers, taking on shifts or overtime, working a second job, starting your own business.”
The retiree also worked overseas in places like Dubai, where there were better salaries and lower taxes, though the downside to this is that he doesn’t have a good pension – and has managed to retire without one.
“One of the disadvantages of working overseas was that I wasn’t eligible to join pension schemes,” David explains.
“I 100% would have paid into a pension more if I had had the chance because it is tax efficient and your employer will often make a contribution.
“Not paying into a pension scheme can be like saying ‘no thank you’ to your employer giving you money!”
“But I have almost no pension, so I had to make my own income via savings and investments.” 
Passive income
David has invested in rental properties instead and low cost ETFs (exchange-traded funds) that give him and Sally passive income.
Passive income is money you make without having to do anything, for example interest you earn on savings, or returns on investments.
An ETF is fund that is traded on a stock exchange, which tracks a range of investments. This could be specific markets or government bonds, or particular sectors like tech or health.
He said: ”I discovered ETFs once I’d retired. My investment can be in literally thousands of different companies.
“I like this because if one or two businesses were to go bust or do badly, it doesn’t have a big impact as the other thousands are still OK.
“I’m keeping my eggs in lots of different baskets. And there are ETFs available that have very low fees.”
It’s worth remembering though that returns from investments, including rental properties and ETFs, are never guaranteed and can go down as well as up.
Anyone wanting to retire early is likely to need a similar form of passive income when they first quit work – even if they do have a pension.
Money saved into a workplace pension is locked away at least until the age of 55 in the UK.
But that is rising to 57 in 2028 and could rise again in future.
The age at which you can access the state pension is currently 66 and it’s worth £203.85 a week. That’s due to rise to 67 by 2028 and 68 by the end of 2046.
The couple will both be eligible for the state pension once they reach 67.
Then there are savings – which David suggests anyone planning to retire early should start building up as soon as possible.
“Automate the amount you want to save each month and pay yourself first by transferring this to your savings or investment account as soon as you receive your salary,” he advises.
“Start saving as early as possible to get into the habit, and then as earnings grow, the amount you can save increases as well.
“My biggest saving years were in my late thirties and early forties.
“Also, if you get a bit of extra money, perhaps a bonus at work, save it, or at least most of it – it’s easy to say that if it isn’t expected then it can be spent, but that will delay your retirement date.”
Stick to a budget and avoid lifestyle creep
One of David’s biggest tricks to saving for early retirement was keeping account of living costs every month and keeping to strict budget.
“Know what you spend by tracking your costs (you’ll probably spend less simply by doing this),” he says.
“I’ve always kept track of our money a few times a month. I have a spreadsheet and check where we are compared to the month before.
“Making a budget can also help. Having this focus will help you manage your money, and may naturally put a brake on spending, meaning there’s more to put into savings and investments.”
David regularly reviews his spending as well. “Without much effort, I found savings by changing our TV and mobile phone packages, switched to a lower cost supermarket, started using a shopping list, found better car insurance deals and changed utility suppliers.”
He says that resisting lifestyle creep is also important. This is when your discretionary spending increases when you start to earn more.
“For many years, our friends tended to have bigger houses and nicer cars than us,” David says.
“It was always tempting to try to keep up, but that would mean we would save less.
“We had a bigger house when the kids were at home, but we downsized when they left and kept our housing costs under control and appropriate to the number of people in the house.”
The couple own their own home so don’t have rent or mortgage payments.
David estimates they spend around £55,000 a year on living costs, but if needed they could reduce this to £35,000 and still enjoy holidays and eating out.
Currently this comes from rental income, while money they make from ETFs is reinvested.
The pair also have £50,000 each saved in premium bonds.
Zero regrets
David handed his notice in at work in January 2016 and eased himself in gently, working for his old employer part time for six months after he left work, which he thinks was a useful transition.
He also reminded himself not to panic about money and that he could go back to work and earn again if he needed to. 
He now spends his days cycling, running, planning trips, learning French and having coffee with friends – as well as tasks like supermarket shopping and ironing, which means they don’t need doing at the weekends. 
The national retirement age is set to rise from 66 to 67 between 2026 and 2028 and, though retiring in our 40s might be a pipe dream for many of us, quitting work a few years early is not an unrealistic goal.
“Perhaps it’s reasonable to imagine being active and fit until 75. This gives eight years of active retirement.
“By retiring one year earlier, we get nine years of active retirement (that’s a 12.5% increase), two years earlier, it’s ten years of active early retirement (a 25% increase),” considers David.
“Retiring early by one, two, three or four years seems much more doable.
“If I had to choose between an extra year of retirement aged 60 or an extra year of retirement aged 90, it’s a no brainer.
“I’m choosing earlier because I want to have my retirement when I’m young and fit enough to do more things.
“I don’t laze about, I make plans and set targets, and I keep a routine… mostly.

“I’m convinced these things have made a big difference in making my early retirement a success so far,” he says.
“For me, it’s life with a lot less stress and a lot more choice. I have zero regrets. I don’t miss work, I definitely don’t miss the pressure and the stress that came with it, and I’m loving the new things that I’m doing.”


Recommended For You