Potentially 150,000 people pushed into early retirement by coronavirus

More than 154,000 55-64-year olds could have been pushed into early retirement by the Covid-19 pandemic, according to research from LV.

Survey data from the firm’s Wealth and Wellbeing Monitor showed that 3 per cent of 4,000 respondents in the age group, which consists of a total of 6.4 million people nationwide, had taken early retirement, while 4 per cent had accessed some of their pensions savings to supplement their income because they had been made redundant or their earnings are reduced.

The survey also indicated that work was likely to be treated more importantly by those who had kept their jobs, as 6 per cent of those aged 55-64 said they would retire later than planned to save more for retirement.

LV= managing director of savings and retirement, Clive Bolton, said: “Early retirement is attractive for many people – but it can become a financial nightmare if it is forced on people without any planning because of redundancy or illness.

“Your 50s are critical years for retirement planning because that is the age when many people’s earnings and pension contributions peak. Being forced to end a career before you planned will disrupt retirement plans. Many will opt for early retirement and accept a lower income in retirement while others will switch to lower paid work and delay their retirement.”

Additionally, the firm’s survey data showed that of 82 per cent of non-retired adults had not checked the value of their pensions in the past year, leading LV to note that the population is “not well prepared for retirement”.

Amongst those planning to retire in the next five years the number was not much improved, with three-quarters (75 per cent) stating that they had not looked at their pension value in the last year.

More than half (59 per cent) were not confident they would save enough for a comfortable retirement, with that number reduced to one in three (34 per cent) for those who were planning to retire in the next five years.

Just over one in ten (11 per cent) of non-retired adults believed they would never be able to afford to retire.

Bolton commented: “Retirement can last a long time, maybe 35 years or longer, so it is important to think ahead to fund the lifestyle you want without running out of money or incurring unnecessary tax bills.

“Younger people with many years to retirement should make sure they join their employer’s pension scheme and save as much as they can. Older people should review how much their pensions are worth, how much they need to enjoy a secure retirement and what they need to do to enjoy the retirement they want.”

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