A large number of people over 50 and in work are set to delay retirement (15%) by an average of 3 years, or keep working indefinitely (26%), as a direct result of the Covid-19 pandemic. However, Legal & General Retail Retirement suggests that people – particularly those who have been furloughed or seen a pay decrease – could benefit from a financial review to assess their options before changing their plans.
1.5 million workers aged over 50 will delay their retirement as a direct result of the Covid-19 pandemic, according to new research from Legal & General Retail Retirement.* However, the retirement provider has suggested that worried households could benefit from a review of their savings before assuming they will need to delay.
According to the most recent data from the Office for National Statistics, the number of workers aged above 65 years is at a record high of 1.42 million**. However, if people change their retirement plans in response to the pandemic, this could increase. One in six people aged over 50 and in work (15%) believes that they will delay, while 26% anticipate having to keep working on a full or part-time basis indefinitely, due to the impact of the virus.
On average, those who plan to delay their retirement expect to spend an additional three years in work. However, 10% admit they could delay their plans by 5 years or more. These 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 of these workers will delay (19%) and 38% expect to work indefinitely.
Chris Knight, CEO 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”.
*Opinium Research ran a series of online interviews among a nationally representative panel of 2,004 over 50s from the 15th to the 18th May 2020.
** Office for National Statistics, Labour market overview, UK: May 2020
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