As many as 1.5 million workers could delay their retirement as a direct result of the COVID-19 pandemic, according to Legal & General (L&G) Retail Retirement.
Research found that 15 per cent of over 50s still in work will push back their retirement date by an average of three years. However, 10 per cent admit they could delay their plans by five years or more. Over a quarter of those people spoken to (26 per cent) would continue to work indefinitely.
The research also highlights the need for some people to work longer as a result of being furloughed or seeing a decrease in income as a result of the coronavirus. One in five (19 per cent) of these workers said they will delay retirement and 38 per cent expect to work indefinitely.
Separate figures from Fidelity International revealed almost three-quarters of investors (71 per cent) who plan to retire in the next five years think they will have to rethink their plans because of the impact of COVID-19.
“Driven by the financial impact of the pandemic, rather than personal choice”
“The financial impact of the COVID-19 pandemic seems to be particularly pronounced for people aged over 50 who are still in work,” commented L&G Retail Retirement CEO, Chris Knight.
“While some people will choose to work for longer, or indefinitely, the key consideration when it comes to this research is that it seems this decision has been driven by the financial impact of the pandemic, rather than personal choice.”
According to the Office for National Statistics, the number of workers aged above 65 years is already at a record high of 1.42 million.
Knight continued: “We know this is a key stage in people’s retirement planning so seeing a material impact on your household income will naturally lead to pessimism about achieving your retirement goals.
“While it would be naïve to say that these financial issues will not have an impact on people’s ability to retire, it’s important for people to have a strong understanding of the options available to them before concluding that their retirement needs to be delayed or forgotten indefinitely.”
Tips for managing retirement planning in the pandemic
In response to its findings, Legal & General Retail Retirement provided the following tips for retirement financial planning:
- Develop a strong understanding of your total savings – Some people may have more saved than they anticipate in the form of forgotten pots from previous employment, which can be discovered by using a pot-tracing service to understand your total savings for better future planning.
- Consider the role that different types of products might play – Along with pension savings, it’s advisable to look at other financial options for alternative retirement funding. For example, equity release is useful for those with significant property wealth.
- Check on what you’re entitled to – Find out what your entitlements are and make sure you are receiving any relevant benefits, particularly if you have lost your job. You may even want to contact your bank for assistance with things like mortgage payments.