New research from OneFamily shows that three million over-50s are to retire later than planned due to financial strains from the Covid-19 pandemic, and the need to financially support struggling family members.
The financial services provider 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, 12% of those who say they are now likely to need to retire late, expect to end up doing so seven more years later than originally intended.
The issue is that many over 50s recently took a hit to their savings or investments. 36% lost money in the past 18 months, with savings dropping by £2,000 on average.
Men’s savings and investments were more severely affected, losing almost £260 more than women. Looking at different age groups in more depth, those in their 60s have also seen more of a dip in their finances, losing almost £170 on average, compared to those in their 50s. Meanwhile, 6% of over-50s say the value of their pension decreased over the same period.
Money was also tighter during the past 18 months as those in their 50s and 60s helped out close family in financial need. 17% say they dipped into their savings to help relatives who had been hit hard by the pandemic.
10% of over-50s who haven’t yet retired say they would consider using equity release to access value from their house if it meant they could retire earlier. Meanwhile, more than a fifth of this group agree said that they wish there was more financial guidance available for saving and later life finances.
Certain areas of the country are more likely to need to push back retirement than others. Over-50s in London (19%), West Midlands (16%) and the Southeast (15%) are most likely to report that they will need to stay in work longer, while those in the East Midlands (5%) and Yorkshire (7%) are much less likely to do so.
Paul Bridgwater, head of lending at OneFamily 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. Financial advisers specialising in retirement planning will play a key role in helping customers to live comfortably and fulfil their lifelong dreams.
“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.”
