Why the pandemic has changed our retirement plans

What has the pandemic meant for your retirement plans?

According to new research, more than half of UK adults say the Covid-19 pandemic has affected their retirement plans.

The research from insurer Aviva found that 54% of respondents said the pandemic had altered their plans for later life.

We knew already that the pandemic experience was varied, in financial terms, for different people.

Some benefited from an enforced reduction in spending while maintaining their income and working from home. Others saw their income and pension contributions cut or stopped altogether.

The research found that some people are thinking about retiring earlier than before, after gaining confidence in their planned retirement lifestyle.

However, 18% feel less confident about their financial future, with those aged 35 to 44 the least likely to feel financially secure.

This younger age group was most likely to have felt some impact on their retirement plans from the pandemic, with 68% reporting this to the researchers.

This impact was positive for some, including one in ten who used the savings experienced during lockdowns to boost their retirement pots.

14% of 35 to 44-year-olds anticipate a later than initially planned retirement date, and 16% have lost confidence in their ability to secure a financially comfortable retirement.

The research also found that 59% of people felt the pandemic had prompted them to question what is important in life, and half said it had changed their priorities.

There was a polarised finding in terms of deciding our destiny, with 41% saying the pandemic made them feel more able to take control of their priorities, and the same proportion saying they have less control than they did before.

Looking specifically at finances, 41% of UK adults say that life during Covid-19 has encouraged them to build more long-term savings.

Those in the 35 to 44-year-old age group are most likely to feel compelled to save more for the future, with 54% reporting this feeling. The 25 to 34-year-old age group was close behind, with 51% feeling more compelled to save for the future.

However, 59% overall feel less comfortable coping with unforeseen events than they did before the pandemic.

Alistair McQueen, Head of Savings & Retirement at Aviva, said:

“For many of us, the pandemic has had a profound impact on our outlook and caused us to look again at our priorities. The experience of a global health crisis has led many people to put plans on hold and consider the wider implications around significant issues like retirement plans.

“The experience of having decisions taken out of our hands through successive lockdowns has left many people longing for a sense of control. But much as it’s encouraging to see people striving to build more long-term savings, our findings show anxiety about the future is still weighing heavily on their minds.”

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