Millions will retire later due to Covid-19

Job losses and depleting pension pots behind the worrying trend.

Millions of over-50s have had to push their retirement plans back due to the pandemic, research claims.

A year on from the start of the pandemic, many over-50s are among those who have lost their jobs or seen their retirement pots hit by stock market volatility.

Like much of the UK, people aged 50 to 64 were hit hard by the pandemic. Unemployment among this group rose from 2.6% in April 2020 to 4.1% in December 2020, according to the Office for National Statistics.

Analysis by Legal & General has found this drop in income has meant that many are reconsidering their retirement plans.

A third of people aged over 50 and in work told the provider that they have seen their household income decrease due to the pandemic by £500 per month on average.

One in 10 pre-retirees over 50, equivalent to 1.45 million people, now expect to delay their retirement by an average of three years as a direct result of financial setbacks caused by the pandemic.

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A further 20% think they will need to continue working indefinitely as a result of Covid-19.

Andrew Kail, chief executive of Legal & General Retail Retirement, says: “A dramatic shift in household income can often mean that people need to make changes in what they prioritise, but for people in these all-important ‘pre-retirement years’ these changes can have particularly long-lasting repercussions, particularly for people who have stopped saving towards retirement.

“For over-50s worrying about their finances, it’s important they have a clear understanding of what they have in their retirement pots and what other assets are on hand to boost their income at the point they retire, such as property wealth.”

This echoes findings from ii’s Great British Retirement Survey 2020 that found 24% fear they will now never be able to afford to retire.

Andrew Neligan, chartered financial planner for Neligan Financial, says this isn’t something he has noticed among his clients.

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He adds: “Some have found that they can live on less because certain discretionary expenses they did have are now less important or they are adjusting their expectations about what retirement might look like, particularly involving less travel in the next couple of years.

“This might be a skewed view because those who have the wealth to require financial advice also have the financial resilience to weather such storms, in part because of their financial situation and in part due to the benefit of receiving advice.”

David Sinclair, director of thinktank the International Longevity Centre, suggests a job support scheme for older workers, similar to the Kickstart scheme for young apprentices, could help boost people’s retirement savings.

He adds: “We need an equivalent scheme to support older workers back into work. Too often learning opportunities are limited by age. We need to ensure that there are opportunities for people of all ages to reskill.”