18 Mar 2021
Understanding pension options ever more important as the pandemic polarises retirement plans
Has the Covid-19 pandemic created a retirement opportunity gap for the over 50s? At Legal & General Retail Retirement we’ve been tracking the effect of coronavirus over the last year, and our latest research reveals increasing rates of ‘retirement inequality’ in the UK.
Last year we revealed that large numbers of workers aged over 50 were set to delay retirement, and this still holds true – our new data shows that 1.45 million people plan to delay retirement, by more than three years on average. A third of over 50s in work have seen a decrease in their monthly household income, by an average of £500. Elsewhere, ONS data shows unemployment has increased in those aged 50-64, rising from 2.6% in April 2020 to 4.1% in Dec 2020.
But while many have been badly hit financially, many of those in secure employment have been able to save more. We now see a gap emerging, as 1.3 million Brits seem to have benefitted financially from the pandemic. This cohort now anticipate retiring an average of two years earlier than they had previously planned to.
Significant changes in household income naturally lead to people adjusting financial priorities but, for those approaching retirement, such changes can have a long term impact. For over 50s worrying about their finances it’s important to have a clear understanding of what they have in their retirement pots, as well as other available assets that can boost income in retirement, such as property wealth.
It can be very hard for those struggling at the moment but we recommend that anyone who is saving less towards retirement, or has even stopped contributions altogether, returns to their previous savings levels as soon as they can.
Even for those lucky enough to be thinking about retiring early, planning for it can feel like a monumental task, one that’s so easy to put off. A sound starting point in our free online course, Retirement Planning Made Easy, created in partnership with The Open University, which breaks down the process in to short easy steps. And let’s not forget the emotional transition also which we have explored through our Rewirement articles and podcast.
The pandemic has resulted in big changes in many people’s retirement plans. One thing that remains consistent is consumers’ need for guidance and help in understanding their retirement options.