Cost-of-living crisis changes pension plan for a third of over 55s

A third (33 per cent) of those planning to retire in the next five years are changing their retirement plans due to the current cost-of-living crisis, research from Royal London has revealed.

The research, which surveyed savers over 55, detailed that 58 per cent of respondents said they would consider working in retirement, citing remaining active (59 per cent) and money (45 per cent) as the two main reasons for doing so.

Royal London’s research also discovered that the majority (71 per cent) of over 55s say they are yet to achieve their life goals with money being the biggest barrier (40 per cent), possibly making a later retirement more attractive.

Royal London protection product lead, Gary Beyer, commented: “It is clear to see that those aged 55 and over value experiences more than anything else, including material possessions.

“Being able to lead an active, healthy lifestyle, try new things and travel to new places - combined with spending more time with family - is the key to retirement happiness.

“After a tough few years following the pandemic and now with the added pressures of the cost-of-living crisis, being able to achieve these life goals might seem more difficult- But, there are options out there for people who want to make their dreams a reality.”

The cost-of-living crisis is also impacting the amount that younger savers are putting into their pension, with research from Just Group revealing that more than two in five (43 per cent) of savers aged between 45 and 65 have reduced the amount they are saving for retirement.

Just Group also reported that nearly two-thirds (64 per cent) of 45-65-year-olds said that they felt anxious or stressed about the financial impact of the cost-of-living crisis on their lives and 57 per cent are concerned about its consequences for their retirement plans.

Over half (53 per cent) of 45-55-year-old workers also said that financial guidance or advice would make them feel more confident in the face of the cost-of-living crisis, compared to 45 per cent of 56-65-year-olds.

Commenting on the findings, Just Group group communications director, Stephen Lowe, stated: ““It is unsurprising that workers starting to think about their transition to retirement are feeling the pressure both financially and mentally.

"They may be juggling kids, mortgages, a demanding job and maybe even care for elderly relatives – and the cost-of-living crisis will be an unwelcome additional burden.

“Financial guidance and advice can’t make the pressure go away, but it can help people manage it better. It helps people understand their options and gives them some confidence in how best to manage their finances, including plans for retirement.

“Employers who understand the pressures their workers are facing should be quick to acknowledge they have a role to play here.

"Employees tend to have a high level of trust in services that their employer provides and are more likely to engage with those services.

“Improving access to financial advice and guidance is a resource that our research tells us many workers approaching retirement are calling for. These innovative digital and hybrid advice and guidance services now offer employers more employee benefits to create happier, more productive colleagues.”

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