Two in five over-50s have retirement plans altered by pandemic

Two in five (41%) people over the age of 50 who are yet to retire have suggested the coronavirus pandemic has had an impact on their retirement plans, according to new findings from Legal & General Retail Retirement.

The study also revealed that one in 10 pre-retiree over-50s (9%) – equivalent to 1.3 million people – are now expecting to retire earlier than they initially planned to, by an average of two years.

However, 10% of the same group, or 1.45 million people, indicated that they expect to delay their retirement by an average of three years as a direct result of financial setbacks caused by the pandemic.

The findings, based on a nationally representative panel of 2,009 over-50s, found that a further 20% of pre-retirees over the age of 50 anticipate they will need to continue working indefinitely, as a result of COVID-19’s impact.

“One year on from the first national lockdown, we are starting to get a clearer picture of the long-term financial impact of the pandemic,” commented Legal & General Retail Retirement CEO, Andrew Kail.

“A dramatic shift in household income can often mean that people need to make changes in what they prioritise, but for people in these all-important ‘pre-retirement years’, these changes can have particularly long-lasting repercussions, particularly for people who have stopped saving towards retirement.”

Legal & General’s study also highlighted the pandemic’s direct impact on the household incomes of the over-50s. The findings indicated that people aged between 50 and 64 were hit hard by the pandemic, with unemployment among this group rising from 2.6% in April to 4.1% in December, according to figures from the Office for National Statistics.

Further analysis of this data by Legal & General found that there are 429,000 unemployed over-50s in the UK, making up one in four (25%) of all unemployed people.

Thirty-four per cent of people aged over 50 and in work have also seen their household income decrease due to coronavirus, by an average of £500 per month.

“For over-50s worrying about their finances, it’s important they have a clear understanding of what they have in their retirement pots and what other assets are on hand to boost their income at the point they retire, such as property wealth,” Kail added.

“We recommend that anyone who has started saving less towards retirement return to their previous savings levels as soon as they are able to. For those that have been fortunate enough to save more during the pandemic, this could be an opportunity to make additional payments towards their retirement.”

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