Nearly half of furloughed workers adapt retirement plans

Almost half (46%) of currently furloughed workers have changed their retirement plans since the government scheme was launched, new research from Canada Life has revealed.

The findings come ahead of the furlough scheme’s closure at the end of the month.

According to Canada Life’s survey, based on 500 furloughed workers, almost three in 10 (28%) plan to retire later, while 18% are planning to retire earlier than previously planned. On the other hand, more than one in three (36%) plan to retire at the same time as previously anticipated, while a further 18% are still undecided.

The study indicated that over-55s appear less worried about the impact of furlough on retirement plans than their younger counterparts. As a result of the pandemic and being on furlough, 53% of 18 to 34 year olds said their retirement plans had changed, compared to 34% of those over-55s.

Over a third (35%) of 18 to 34 year olds on furlough now plan to retire later than planned, compared to just 10% of over-55s. Furthermore, Canada Life found that furlough and the pandemic has accelerated retirement plans for one in four (23%) over-55s who plan to retire earlier, compared to 18% of 18 to 34 year olds.

“The government’s furlough scheme has been a lifeline for millions across the UK, however we cannot underestimate the number of people who will come out of this scheme in a challenging financial situation,” Canada Life technical director, Andrew Tully, commented.

“This is demonstrated by the fact that many are changing their retirement plans, with a third of younger people planning to retire later.

“Almost one in four over-55s are actually thinking about bringing forward their retirement and leaving work earlier than planned. This could have serious implications for the economy with decades of experience potentially leaving the UK workforce just as we face a jobs and skills shortage.”

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