Pension saving is often seen as a key way to ensure financial security during retirement, and planning ahead is considered to be essential. However, the impacts of the pandemic have been undeniable, particularly for those who are over 50, new research from Legal and General has shown. Opportunities for retirement are becoming narrower, with many not having built up the finances necessary to secure the retirement they have been hoping for.
This calculates at approximately 20 percent of a family’s overall monthly spend of £2,537 and more than the average amount needed to cover all monthly bills, after rent or mortgage payments are taken into consideration.
However, with this squeeze on general finances, many Britons have been forced to reevaluate what they can afford in different aspects of life.
One of the first “costs” to go for a number of people has unfortunately been pension saving, with many reducing contributions or pausing them altogether.
While this is likely to provide some financial relief in the present, the long-term impacts of this could be particularly devastating, leaving Britons at risk of running out of money in retirement.
Mr Kail continued: “A dramatic shift in household income can often mean that people need to make changes in what they prioritise, but for people in these all-important ‘pre-retirement years’ these changes can have particularly long-lasting repercussions.
“This is particularly the case for people who have stopped saving towards their retirement.
“For over 50s worrying about their finances, it’s important they have a clear understanding of what they have in their retirement pots, and what other assets are on hand to boost their income at the point they retire, such as property wealth.”
When tackling the issue of retirement inequality across the UK, many have been forced to take matters into their own hands.
Some one in five over 50s now expect to keep working indefinitely as a direct result of COVID-19.
Additionally, 1.45 million now expect to delay their retirement by an average of three years as a direct result of financial setbacks caused by the pandemic.
Mr Kail concluded by providing next steps for those who are worried about their finances.
He stated: “We recommend that anyone who has started saving less towards retirement return to their previous savings levels as soon as they are able to.
“For those that have been fortunate enough to save more during the pandemic, this could be an opportunity to make additional payments towards their retirement.”
Britons may wish to take financial advice when they are thinking about their pension.
This is because the issue can often be complex and have long-lasting implications and so experts may be able to offer tailored advice.
Alternatively, free assistance is made available through organisations such as the Money Advice Service, Pension Wise and the Pensions Advisory Service.
Do you have a money dilemma which you’d like a financial expert’s opinion on? If you would like to ask one of our finance experts a question, please email your query to [email protected]. Unfortunately we cannot respond to every email.