More than a million British workers plan to put their retirement on hold as a direct result of the coronavirus pandemic.
Research by Legal & General found 15% of over 50s still in work – the equivalent of 1.5 million people – will push back their retirement date by an average of three years. However, 10% admit they could delay their plans by five years or more.
A quarter (26%) of people think they’ll have to keep working on a full or part-time basis indefinitely, due to the impact of the virus.
The figures are significantly higher for the 26% of over 50s workers who have been furloughed or seen a pay decrease as a result of the pandemic. One in five (19%) of these workers said they will delay retirement and 38% expect to work indefinitely.
Separate figures from Fidelity International revealed almost three-quarters of investors (71%) who plan to retire in the next five years think they will have to rethink their plans because of the impact of Covid-19.
Almost half (48%) of all pension investors have seen a fall in the value of their retirement savings and a further half are worried their savings will no longer provide them with the level of income they require in retirement, the research found.
Chris Knight, chief executive of Legal & General Retail Retirement, said: “The financial impact of the Covid-19 pandemic seems to be particularly pronounced for people aged over 50 who are still in work.
“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. 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.”
Legal & General’s top tips for managing retirement planning in the pandemic
Develop a strong understanding of your total savings: Those who feel like they might be forced to delay their retirement should make sure they’ve gone through the process of getting a comprehensive understanding of their total savings. Many people may have more saved than they anticipate in the form of forgotten pots from previous employment. Using a pot-tracing service to understand your total savings will help you plan better.
Consider the role that different types of products might play: In addition to pension savings, it’s also worth looking at a broad range of retirement products to get a holistic understanding of what you can use to fund your retirement. Equity release, for instance, can be a useful tool for people who have significant property wealth that they might benefit from taking advantage of.
Check on what you’re entitled to: There are lots of things being put in place to help people who have financially been impacted by the pandemic. Examine what your entitlements are and make sure you are receiving any relevant benefits, particularly if you have lost your job. Also, many people might want to consider looking at measures their bank has put in place to cover any recent hardship by offering short-term solutions to things such as mortgage payments.