The Covid crisis has caused widespread disruption to people’s retirement plans, with one in five now aiming to work for longer.
This survey, by Aegon found 18 per cent of the general population were planning to delay their retirement, but this figure increased significantly among the over 55s and the self-employed.
The economic fallout of the coronavirus has also caused an upturn in the number of people accessing their pension pots. Aegon found that 12 per cent of the over 55s who hadn’t accessed their pension pre crisis have since taken out money from their pension, with a further 8 per cent considering doing so because of the pandemic.
Despite being decades away from retirement age, figures show that one in five (21 per cent) of those aged 18-34 expect to delay the age of retirement, while 11 per cent of those aged 35-55 said that they plan to delay retirement.
Aegon pensions director Steven Cameron says: “The coronavirus crisis is affecting individuals’ financial situation and for many, their plans for retirement.
“Our research shows that the over 55s and self-employed are set to be hit hardest as many are forced to reconsider plans for the retirement they had hoped for , with a significant number now opting to dip into their pension pot earlier than they may have planned.”
He says that pension freedoms offer flexibility, which can help alleviate short term financial pressures for those over 55.
But Cameron adds: “This can be a double-edged sword… that eaves less of a retirement fund to provide an income throughout what can be decades of retirement.”
He adds that taking larger amounts out of pensions can also mean paying more income tax. “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 and Pensions Service.”