Pandemic forces people to reassess their finances.
The COVID-19 pandemic has affected every part of our lives and continues to have a widespread impact across all aspects of financial life, including retirement plans. Life in lockdown prompted many people to adjust their priorities, for example, to move nearer to family, take staggered retirement or retire earlier.
Over the past twenty months, life has looked and felt very different for many of us. A lot of what was previously taken for granted and routine has been challenged and changed in unanticipated ways. The pandemic has also forced many people to reassess their finances, access their pension pots and bring forward or change their retirement plans.
Polarising impact of the pandemic
More than half (54%) of UK adults say the impact of the COVID-19 pandemic has affected their plans to retire, according to new research. The findings lay bare the polarising impact of the pandemic and its stop-start effect on people’s future plans.
While some people envisage retiring earlier and have gained confidence about living comfortably once they retire, nearly one in five (18%) feel less secure about their financial future, peaking at more than one in four (27%) aged 35 to 44.
Lockdowns used to save more for retirement
Across the generations, the 35 to 44 age group are the most likely (68%) to have felt some impact on their retirement plans from the pandemic. This has been positive for some, including one in ten who used the lockdowns to save more for their retirement.
But almost one in six people (14%) aged between 35 and 44 anticipate their retirement date may be pushed back, while 16% have lost confidence in their ability to live comfortably once they have retired.
People questioning what’s important in life
The findings show nearly three in five (59%) people feel the pandemic has made them question what’s important in life, while half said it has changed their priorities. However, the research reveals a nation polarised when it comes to deciding its own destiny.
While 41% say the pandemic has made them feel they can take more control of their priorities, the same proportion (41%) say they have less control than they did before.
Suspended or cancelled a planned life event
When it comes to their finances, more than two in five UK adults (41%) say life during COVID-19 has encouraged them to build more long-term savings. People aged between 35 and 44 are most likely to feel compelled to save more for their futures (54%), followed by 51% of those aged 25 to 34.
However, 27% overall say they feel less comfortable about coping with unforeseen events than they did before the pandemic. This includes 29% of those aged 44 to 54 and 24% of over-55s. The findings also show more than half (53%) of UK adults have suspended or cancelled a planned life event during the pandemic.
Seeking to progress future ambitions more quickly
Among those affected, almost one in six (16%) have held back from starting a new job; 13% have postponed buying a new house; 12% have thought twice about starting a new business; one in ten (10%) have pressed pause on trying for a baby; and the same (10%) have postponed getting married.
Despite more than half (54%) of people feeling that life has been ‘put on hold’ during the pandemic, many are now seeking to progress more quickly with their future ambitions. Among this group, 19% are fast-tracking a move to a new job; 13% will start a new business; and 13% are trying for a baby.
Making life-changing financial decisions
It’s always important to think ahead to retirement and plan for the future, and even more so now that we have to deal with the impact on our finances due to the coronavirus crisis. It’s important not to rush into making lifechanging financial decisions before obtaining professional financial advice first.
Making the right investment decisions can help you increase your financial security and provide income that you can use to live comfortably after you stop working. If you don’t have an income strategy or are unsure of what it is, now is the time to talk to us.
Time to review your pension and retirement plans?
When was the last time you reviewed your pension? Do you know how much you’ve put aside for your retirement and do you know how well those investments are performing? We will ensure you are making the best informed decisions for your situation and retirement plans. To discuss how we can help you, please contact one of our advisers by clicking here.