The COVID-19 pandemic has taken a financial toll on millions of Britons, with older workers being particularly badly impacted by the health crisis. As a result, many people over the age of 50 will have no choice but to continue working later into their life.
Indeed, it appears that three million over-50s will retire later than planned due to financial strains from the pandemic, and the need to financially support struggling family members.
This is according to new research from financial services provider OneFamily, which found that on average, those over the age of 50 will need to push back their retirement by four years in order to recover from the financial impact of the pandemic.
In addition, an eighth (12 percent) of those who said they are now likely to need to retire late, expect to end up doing so seven more years later than originally intended.
OneFamily say the problem is that many over 50s recently took a hit to their savings or investments. More than one in three (36 percent) lost money in the past 18 months, with savings dropping by £2,000 on average, according to research.
The research also suggests that certain areas of the country are more likely to need to push back retirement than others.
In fact, over-50s in London (19 percent), West Midlands (16 percent) and the Southeast (15 percent) are most likely to report that they will need to stay in work longer, while those in the East Midlands (five percent) and Yorkshire (seven percent) are much less likely to do so.
Matthew Ellis Head of OneFamily Advice said: “It’s the perfect storm; unemployment, family members needing additional financial support and rising costs have led to an inevitable drain on life-savings. The savings pot is empty for many people.
“The repercussions of the pandemic will affect people for years to come and are already affecting retirement plans for three million UK adults.
“Equity release is a valuable tool that can help free up wealth from bricks and mortar. With continued concerns around the cost of care and pressure on family finances, we expect to see equity release being used more often to enable a better standard of life in retirement.”
Pete Mugleston, MD and Mortgage Expert at Online Money Advisor offered his advice to people who are concerned that they do not have enough pension savings in order to retire when they would like to.
He said: “If you’re concerned about not having saved enough money for retirement, fortunately there are several steps you can take now to sort out your retirement savings once and for all.
“With state pensions forming the foundation behind every retirement, it’s important to check how much you’re entitled to and any other benefits in advance (if you’re not on track for the full amount – don’t panic).
“Alongside this, we’d advise having a pension review as they’re free and can help to considerably maximise the amount of pension you end up with.
“An Independent Financial Advisor (IFA) will ensure your pension funds are invested in the best possible place and merge any dormant pensions with your current account, so that they grow along with it.
“Similarly, it’s essential you explore all pension alternatives and other investments such as Lifetime ISAs which are designed to help you save for later life and conveniently, you can have a Lifetime ISA alongside a pension.
“Also, why not consider earning income from your home? If you’re a homeowner, you could explore potential revenue streams from that, like equity release or taking in a lodger – you’ll be surprised how quickly the savings will start to amount. You could even consider downsizing, if possible, to boost your savings further.”