The coronavirus is “considered Brits' biggest threat to retirement,” a new report has said, which shows that nearly a fifth of respondents have been forced to spend their retirement funds early.
Some 17% of over 50s have needed to dip into their retirement savings early due to the tolls of the pandemic, resulting in more than a third (38%) believing they will struggle financially in retirement, the New State of Retirement 2021 report by insurance company British Seniors said.
About 77% of over 50s believing COVID-19 will directly impact their ability to retire while 22% of those approaching retirement have delayed their plans, the study said.
Just under half (48%) of those surveyed felt they would be able to retire by the age they had intended, with the pandemic delaying retirement by an average of two and a half years.
“The impact of the pandemic has compounded several long-term barriers to retirement, specifically the challenge faced by over 50s in balancing high living costs with saving for their future,” the report noted.
Among the over 50s surveyed, over a third (34%) had less than £50,000 ($69,544) in pensions savings, with the same percentage (34%) also carrying some level of non-mortgage related debt.
The impact of the pandemic was cited as the top retirement threat, followed by high living costs and the inability to save.
While the majority of those impacted by COVID-19 are delaying their plans, 8% had been made to retire before they had planned, citing health concerns (28%) and difficulties in finding employment after losing their jobs (16%).
David Rees, Chief Operating Officer of British Seniors, noted that “while families everywhere have felt the impact of the pandemic, our report found that those approaching retirement have been hit hard, and for some their retirement dream is increasingly falling out of reach."
He said that for those approaching retirement, it’s vital to begin planning early.
"Just 16% of over 50s in the report have taken proactive steps towards retirement planning, and as we enter a new world post-Covid-19, taking early steps will be more important than ever in securing your retirement dream," he said.
“Seeking professional advice and ensuring you have the right products in place can help give you confidence and peace of mind in your golden years,” he added.
Just last week, the UK government announced a consultation on its decision to up the normal minimum pension age (NMPA) from 55 to 57 from April 2028.
The move reflects increases in longevity and changing expectations of how long we will remain in work and in retirement, it said.
The consultation document said: “Raising the normal minimum pension age to age 57 could encourage individuals to save longer for their retirement, and so help ensure that individuals will have financial security in later life.”
And a report from last month showed that lockdowns and stresses in the labour market have led to people in the UK contemplating later retirements.
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