Research* has revealed that almost a fifth of people aged 50 or over believe their retirement will be affected by the pandemic. Of these, a quarter say they have not been able to retire due to their finances, a fifth have had to use some of their retirement savings whilst out of work and a tenth have retired sooner than expected due to redundancy.
Playing catch up for your retirement
Separate data* shows employees in certain industries, who were already struggling to save into a pension, could be particularly hard-hit and face a lifetime of ‘playing catch up’ with their retirement savings. More than a quarter of those working in travel and the arts have not yet started saving into a pension, while two-thirds of retail workers are concerned they would soon run out of money if they did retire.
The impact of auto enrolment
It’s not all doom and gloom, however. Thanks to auto enrolment, more than 10 million people have saved into a workplace pension, and those putting away the minimum has reached a record high. However, there are signs the positive impact of auto enrolment is starting to wane, with almost half of 22 to 29-year-olds still not doing enough to prepare for later life and many potentially facing retirement poverty.
It’s all about you
It’s never too early or too late to get your retirement plan on track, whatever stage you’re at and whatever sector of the economy you work in.
If you’re younger, don’t allow any dips in income to impact your pension contributions if at all possible. Small, frequent contributions throughout your life add up and make a difference to the quality of your retirement. If you’re older, you may be considering postponing retirement or if you lose your job, you might choose to retire earlier than you had originally intended. If you still have a job but your savings have been impacted, delaying retirement to give yourself more time to prepare may be an option.
Don’t rush into making life-changing financial decisions
Of course, it all depends on your individual circumstances. The key takeaway is that for many people, decisions about their retirement, now more than ever, have been driven by the financial impact of the pandemic, rather than personal choice. We want you to be able to call the shots, to be in control of your retirement and to have options. Whatever your circumstances, we’re here for all your financial planning needs.
*1 – Co-op, 2020
*2 – Scottish Widows, 2020
