Jon Ellis, 54, retired at 52 alongside his wife Jo after having a “eureka moment”, with the couple having a combined pension pot of £1.25m.

Jon, who had a variety of different jobs but most recently with Amazon Logistics, said: “Jo came up with the logic that if we lived to roughly the same age as my parents, and we spent at roughly the same rate, we could afford to live without working, and not run out of money.

“Over the next year we worked through the numbers, and also paid for a financial review with a local advisor to validate our assumptions. The plan was slightly changed by Covid, which delayed our actual decision but we ‘hit the button’ about three years ago.”

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Jo is older than Jon and so although rules say you cannot draw out of a private pension before the age of 55, they draw £40,000 annually from her plan – plus they are taking money from their ISAs, of which they have £150,000 saved each, whilst Jon has income from renting out his annex.

He said: “Jo started her pension at 19 when working for her parents’ business; I started around 25 when I first started a ‘proper job’ after university. We generally put in the typical matched company contributions of 3 per cent plus the occasional additional contributions.”

Very early on, Jon took an option to opt out of SERPs – the state earnings-related pension scheme (also known as the additional state pension) – and had the contributions paid into his private pension.

SERPs was replaced by the state second pension, which ran until 2016.

Jon said: “I did this on the basis that I thought I’d be better at managing my own money and investments than leaving it to the government.

“Whenever my wife and I changed jobs, we typically closed our old company schemes and transferred them into our personal pensions so we always had good visibility of their progress. Mid-career, I was also a pension trustee for a defined benefit scheme, and I learned a lot about general investing and returns.”

The couple prioritised paying off their mortgage and achieved this when Jon was 48.

They took in a lodger in their spare room to help pay off their mortgage quicker but it also allowed them to qualify for additional allowance under the “Rent a Room scheme”, which lets you earn up to £7,500 per year tax-free.

They rented it out for £350 a month and also rent out their annex to a family member for £650 per month.

Jon said: “Other ways we saved was not wasting money. Second-hand cars and not falling for the latest technology or branded fashions. Whilst I’d say we were relatively frugal in many ways, we were not extreme savers and did still enjoy ourselves.”

The couple enjoy travelling and have five to six holidays a year. They are aiming to do the “big travel” holidays while they are still younger.

“One of our first trips was to visit my brother’s family in Australia, via Bali. Where our typical holidays used to be two weeks in the sun in Europe, we have since done several trips to the Caribbean, the Maldives, South Africa and Japan.”

Later this year, the couple have a Mediterranean cruise before visiting Australia and New Zealand over Christmas.

“We are also able to fly business class, which is a true luxury on longer trips. Without the ties of work, we have also been able to support our local community and volunteer with a charitable trust as well as spending more time with friends and family,” Jon said.

Jon released a book on personal finance and how he was able to retire early.

“I’ve also started giving talks at my local school to help students understand money, and their long-term ideas about saving and investing.”

‘Everything feels at a more comfortable pace now’

Susan Black, 61, says she has been able to “slow right down” since retiring at 59 – and calls it the best decision she has ever made.

Susan, from Edinburgh, retired eight years before she would receive her state pension after working in financial services for over three decades.

Her savings are made up of a final salary pension – which she transferred into a self-invested personal pension (Sipp) in 2017 – and a defined-contribution (DC) workplace pension.

There are highly considerable risks in transferring a final salary pension – which guarantees an income for life in retirement – as it can drop in value, and you take on investment risk, so it is important to seek financial advice before making any decisions.

Susan with her dog at Arthur's Seat in EdinburghSusan Black with her dog at Arthur’s Seat in Edinburgh

And if you want to move one into a DC pension or Sipp – an invested pot of money earmarked for retirement – if it’s over £30,000, by law, you must seek out a regulated financial adviser.

Susan said: “Before I transferred my final salary pension, I never even thought about my pension. However, when I joined my DC scheme, the employer matched contributions.

“They matched half a per cent for every per cent you put in so I was putting in the maximum.”
Susan’s original plan was to retire at 55 but then the Covid-19 pandemic hit, and she decided to continue working through lockdown.

“At that point my expenditure went right down so I was putting in 30 per cent of my salary into my pension,” she explained.

Susan retired at 59 and now draws down the same amount of money she was taking home when working – amounting to £2,500 a month – which covers her son’s rent at university, paying for her dogs as well as holidays and weekends away.

She said: “I see people sometimes say they need to take home £8,000 a month in income in retirement and I think – what?!”

She said since retiring her stress levels have reduced drastically and she has been able to lose weight.
“I had time to go to the gym more, started cooking properly and not eat the kind of rubbish you grab when you’re in a hurry,” Susan said.

She said when she was working, she would do everything at “a million miles an hour” but now “everything feels at a more comfortable pace”.

Susan says her monthly income allows her to go to the theatre once a month, go to gigs and go for weekends away in her van.

“I don’t own a fancy car, don’t eat out an awful lot, I don’t go to the pub a lot, but I feel that I live a fairly good life,” she added.

Retiring has also allowed Susan to work within her local community.

She said: “I’ve just started volunteering on a canal boat in Edinburgh, which mainly runs trips for charities to give people a couple of hours out on the canal.”

Susan is also a carer for her elderly mum and she has joined a charity supporting carers that puts on workshops.

“I’ve been to art classes and done felting. I’ve been on courses to learn about dementia to learn how to deal with my mum’s illness,” she said.