Growing fear that economic crash could hamper UK's retirement plans

Twenty-nine per cent of Brits are now fearing an economic crash could hamper their retirement plans, according to a new survey from Sanlam.

The financial services group suggested the figure marks a significant annual rise of 45% in the number of people who now believe a serious downturn to be the biggest threat to their retirement goals, having sat at 20% in 2019.

When asked the same question last year, Sanlam found that illness was cited as the biggest barrier among those surveyed (21%) but is now a concern for only 14% of respondents.

The findings, based on an online survey conducted by Atomik Research among 2,007 UK adults between 22 and 24 April, were published amid the sharp stock market falls amid the coronavirus crisis, which Sanlam suggested had brought the UK economy to a halt and “shaken people’s confidence” in their ability to save.

Those approaching retirement aged between 55 and 64 were revealed to be the most concerned about the impact of an economic crash on their ability to hit their retirement goals, with more than a third (34%) fearing a crash as the biggest barrier to their plans – up from 22% in 2019.

CEO of Sanlam‘s wealth division, John White, said: “The outbreak of coronavirus and the subsequent public lockdown has shaken the UK economy to its core and our survey reveals the very real long-term financial concerns people now face.

“The sharp market falls we witnessed in March have alerted people to the damage an economic crash could wreak on pension pots, and understandably more people now fear that a wider, continued downturn could derail plans to retire when they want to.

“It is unnerving to watch the value of hard-earned savings take such a hit, particularly if this pot is not as large as it perhaps could be to sustain the kind of lifestyle many may seek once they give up work.”

Sanlam’s findings also revealed that more people are struggling to save enough on a monthly basis, with 25% indicating this was a barrier to achieving their retirement goals, up from 19% last year.

Furthermore, the survey revealed 19% of respondents were not confident of achieving the savings they need to retire when they want, while the proportion of those who said they were confident has fallen to less than half, down to 48% from 56% in 2019.

“If this crisis has proven anything, it is that it pays to be prepared,” White added. “Steady savings are key to ensuring people can leave work when they want to and enjoy a comfortable retirement.

“We urge people to seek out expert financial advice if they are worried about what the future holds and what a struggling economy could mean for their ability to hit their retirement goals. Most importantly, people should prioritise saving sooner, rather than later, if they are able.”

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