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This year’s pandemic has changed many things. And according to figures published by the Institute of Fiscal Studies in September, it’s also caused one in eight older workers to change their retirement plans.
It’s only natural to review your overall spending during times of turmoil, and COVID-19 has certainly had an impact on people’s finances. In May, a survey by Legal & General found that 1.5million workers aged 50 or over are planning to delay their retirement as a direct result, on average by about three years.
The reasons for this are several. Lockdown has given many people the time to fully review their finances and spending, and look into their retirement options in greater depth. According to Aviva, during lockdown 37% of pension savers had taken some sort of action relating to their pension – 16% saying lockdown had made them think about their pension more, with 8% checking where their pension’s invested or increasing their contributions.
The impact on household income and changing financial situation is bound to have had an effect on attitudes towards retirement, leading people to put their plans on hold while the situation hopefully returns to normal.
With uncertainty in the global economy and financial markets too, especially the early losses on stock markets, those about to retire have been particularly affected as there’s less time for their fund values to recover – leaving them a choice of delaying retirement, withdrawing a smaller amount rather than the full investment or living off other savings for a while.
Rowena Crawford, an Associate Director at the IFS, commented on their findings: “The current pandemic risks having serious and long-term financial consequences for older workers, affecting living standards into and through retirement. The crisis has also been disruptive to major life plans, with one in eight older workers so far changing the age at which they planned to retire. Those on furlough are now more likely than those working to be planning to retire earlier…on a positive note, those working from home are now more likely to be planning to retire later; suggesting changes to work practices could benefit some older workers.”
These various research findings highlight the importance of having a financial plan in place as early as possible, rather than relying on the later stages of working life to fund your retirement. But whether you’re planning for years ahead or considering whether or not to change your retirement plans in response to COVID19, it’s now more important than ever to review your pension options and seek independent financial advice.
Slater Financial offers impartial advice to help you fully understand all your financial options so you can make an informed decision for your future. To undertake a 90-minute review of your current pension provisions and the options available, call us on 01298 212444 or email email@example.com to make an appointment.