I am hoping to take early retirement and am considering options for deriving an income.

I have 8 years to go before I can touch my private pension, (20 until I can get my state pension) I expect this to be worth around £200k depending on how the stock market performs (risk) I would also have around £50k in savings by then as well.

What options do I have to use this to fund my retirement? I am not risk averse but have to be sensibly cautious.

I am aware of annuities, but they provide a dismal income (although it is guaranteed) or at best 3%, this is not enough for me to realistically retire on anything like a good standard of living.

I need a minimum of 8% to be "comfortable".

So, are there any other options?

I have considered shares to earn through dividends, buying property to rent out as well as setting up some kind of business, ie property development etc.

I am aware of "peer to peer" lending that appears to average out around 7% so that might be an option.

My thoughts are to put some into shares for dividend income, some into P2P lending and possibly start a business to derive income with the rest.

What other options do I have?

  • 2
    peer to peer Stay away from it now. At your current age it is very risky and don't get sucked into the mirage of higher returns.
    – DumbCoder
    Oct 10, 2016 at 13:41
  • Airbnb can be lucrative, if you have a suitable property in a honeypot location and can stand having guests?
    – timday
    Oct 20, 2016 at 23:41
  • What about franchises? I may start another question.
    – davidjwest
    Oct 21, 2016 at 13:17
  • 1
    The Telegraph's Questor column has been running an intersting series of articles on the setting up of an "income portfolio" telegraph.co.uk/business/questor . Last couple have been picking up some pretty racy high yielding stuff, although the initial article said overall it's looking for 5% target overall telegraph.co.uk/investing/shares/…
    – timday
    Oct 23, 2016 at 0:14

2 Answers 2


It's highly unlikely that you will be able to achieve 8% and would consider myself lucky to get 4% in the current interest rate environment. You might want to read some reviews of peer-to-peer lending and even try it out some yourself. Give yourself something like 2000 Euros/Dollars and a year. If you truly need 8% to retire, then you are not ready to retire.

Here in the US it increases the complexity of your tax forms. I did an experiment with lending club. Here is what I found:

  • Contrary to expectations people with really good credit histories will default on their loans.
  • Despite countless late payments, lending club never shared any late fees with the investor.
  • You are in for a lot of work or not diversifying your risk. It can take 40 mins or so to find a good note or two, and if you are lending $25 at a time, the amount received is not a good return on your time.
  • For a good portion of your time, your money is not at work. So the returns quoted are somewhat inaccurate. By the time you decide to invest in a note to the time you receive the first payment, you typically wait 6 weeks.

After 18 months of giving it a try, I decided to abandon this strategy. My money will receive better and safer returns in a dividend focused mutual fund.

However, I encourage you to give it a try yourself.


Some people put money into Venture Capital Trusts for the yields they offer. The risks are different and they are considered higher risk than ordinary equities; you need to be a sophisticated investor or high net worth individual to consider them.


I'm not recommending these for you, just pointing it out as another option as per the question.

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