Posted on: 26th June 2020
According toprovider Aegon, 18 per cent of the population expect to make changes to their financial planning in line with the impacts of COVID-19.
Those who are self-employed have been particularly hit hard by the pandemic. 40 per cent of self-employed workers said they have had no other choice but to reassess their retirement plans. 22 per cent stated that the uncertainty of the pandemic has led to them putting off their retirement.
Meanwhile, 12 per cent of those aged 55 and over who had not accessed their pension funds before the coronavirus outbreak have now done so. What’s more, a further 8 per cent who haven’t dipped in have considered doing so.
According to the research, not even younger generations were immune to the impacts of the pandemic, with 21 per cent of those between 18-34 and 11 per cent of those aged between 35-55 expecting to push back their retirement age.
Steven Cameron,director, Aegon, said: “Those who are self-employed and employees who have been furloughed, particularly those at or nearing retirement age are most likely to have had plans to retire thrown up in the air. We hope the impact of the coronavirus crisis on their finances will be temporary and they’ll be able to get their savings plans back on track in the not too distant future.
“For those over age 55, the pension freedoms offer extensive freedom and flexibility in how they access their defined contribution pensions, but this can be a double-edged sword. It’s positive that people have the option to use retirement savings intended for later life earlier to reflect their situation. But just because you can access pensions early doesn’t mean you should.”
Cameron continued to express his concern for the considerable number of people accessing their retirement funds earlier than planned. He warned that it would leave less income through the decades of retirement, with the potential to leave individuals paying more income tax. According to Cameron, it “may be better” to consider using savings first.
He added: “It’s always important to think ahead to retirement and plan for the future, and even more so as we face up to the coronavirus crisis. We encourage people not to rush into making life-changing financial decisions and to first seek financial advice or support from the Government’s Money andService.”
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