The Effects of COVID-19 on Retirement Planning

Posted on: 13 Jul, 20

In our Guide to the E!ects of COVID-19 on Retirement Planning, as the coronavirus pandemic continues to dominate world headlines, we consider how this may a!ect individuals’ "financial plans for retirement. A significant number of people aged over 50 and in work are potentially considering delaying retirement (15%) by an average of three years, or will continue working indefinitely on a full or part-time basis (26%), as a direct result of the COVID-19 pandemic, according to new research[1].

Change to retirement plans

Data from the O#ce for National Statistics currently shows the number of workers aged above 65 years is at a record high of 1.42 million[2]. However, if people change their retirement plans in response to the pandemic, this could increase considerably. While, on average, those who plan to delay their retirement expect to spend an additional three years in work, 10% admit they could delay their plans by five years or more. These figures are significantly higher for the 26% of workers over 50 who have been furloughed or seen a pay decrease as a result of the pandemic. 19% of these workers will delay, and 38% expect to work indefinitely.

Impulse to react, and to protect

Some retirees nearing retirement age might need to be $exible with their plans for the future. It’s uncertain just how long it will take for life to return to normal, and while some people may still be able to retire right on schedule amid the COVID-19 crisis, others may need either to postpone retirement or consider retiring early. As a result, the impact of COVID-19 on stock market performance may also be leading some retirees and those close to retirement to question their investment strategy, but what’s the right approach? Understandably, the impulse to react – and to protect what we have – is strong...

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