Recent research undertaken by Aegon has shown that UK workers are less likely than those in many other countries to want to stop working as soon as they reach retirement age. Only 30% of those UK workers questioned said this was their intention, compared with 57% of Spanish, 49% of French and 40% of Germans.
Indeed, since April 2011, UK employers are no longer allowed to force their employees to retire. Gone are the days of the ‘cliff edge’ of retirement when one could be working a 40-hour week one week and zero hours the next. Employees can now (with one or two exceptions) continue to work for as long as they need or want to. And, as the research by Aegon shows, many plan to do so for many and various reasons, the topmost being a desire to keep active and their brain alert.
COVID19 has had a significant impact on people’s retirement plans. Aegon’s research shows that 18% of those questioned said the pandemic had caused them to alter their retirement plans. Twenty per cent of over 55s who hadn’t accessed their pension pre-crisis reported either having taken out money or were considering doing so. The self-employed are particularly badly affected, with 22% of this group now planning to put off retirement due to the uncertainty caused by the pandemic.
There are concerns that many of those who are planning to work beyond retirement age for whatever reason have failed to make contingency plans in the event that they are unable to do so. They haven’t considered the possibility, for example, of being unable to work due to ill health, ageism in the workplace or the need to care for loved ones. Yet this is a real possibility: research shows that there is a very high likelihood of this happening, with around half of retirees ending up retiring sooner than they had planned.
Failing to plan for all eventualities could mean that individuals have to draw on savings earmarked for retirement. Consequently, funds could run out sooner than they had envisioned.
If nothing else, the Coronavirus pandemic has shown us that the unexpected can happen. Make sure you’re prepared, as far as is possible, by speaking to one of Brunsdon’s expert Financial Advisers.
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