Putting off retirement has been a feature of modern life for some time as state retirement age gets pushed back and the prospect of a longer life makes retiring at 60 very expensive.
However according to research by Legal and General it looks as though the economic disruption as a result of the Corona Virus outbreak has given an increasing number of would be retirees pause for thought. Some 1.5 million people plan to delay retirement by three years as a direct result of the COVID-19 pandemic.
For many close to retirement, pension investments will have decreased in value which means that if they were to take the 25% tax free amount available as cash, they would be doing so at a time when investment value is depressed. Also, to then begin taking a monthly income from the pot will further compound the problem. For others who may not be due to retire for 5 to 10 years, they may feel that the economic volatility will have a further impact on their pension savings, making it difficult to create a big enough pot for their needs.
For those who face unemployment or a pay cut, it may feel like they will never be achieve their retirement goals.
On average, those who plan to delay their retirement expect to spend an additional three years in work. But 10% fear they might have to delay their plans by five years or more.
Those over 50 and still in work are the most affected by the recent economic turmoil, however there is still time to plan and good advice is essential.
At FMB we use cashflow modelling to build economic shocks and disaster planning into our models to see how resilient your retirement plans are. We know that life does not follow an ever upward path and there will be ups and downs, but it is very important to recognise that when the downs occur can have a significant impact on your finances. We also know that the sooner you start to plan, the better your retirement outcomes will be so if you are worried that Covid 19 may have an impact on your plans, give us a call. There is no charge for our first meeting.