"Pandemic takes toll on UK retirement plans of over-50s"

[dutchman]

Hundreds of thousands of people facing prospect of working longer or tapping pension savings early



Across the country, hundreds of thousands of workers in their fifties and sixties are facing up to the prospect of working longer than anticipated, or dipping into retirement savings prematurely, as the Covid-19 crisis takes its toll.

“Some clients have decided to keep on working beyond the date they had planned to retire,” said Christine Ross, client director with Handelsbanken Wealth Management.

“I am [also] aware of instances where individuals who are still working have accessed their personal pension arrangements earlier than anticipated in order to bridge the income gap until their earnings return to pre-pandemic levels.”

The coronavirus crisis has disproportionately affected the youngest and the oldest workers in the economy, since they have so far borne the brunt of job losses.

Older workers are particularly sensitive to economic shocks as they have less time to recover financially from a market blow to their pension funds, or loss of income, before retirement.

The number of over-50s on unemployment-related benefits nearly doubled as a result of the pandemic, increasing from 304,000 in March to 588,000 in June, according to analysis by the Centre for Ageing Better, an independent think-tank.

Further, there is a risk of a surge in job losses for older workers when the government’s furlough scheme ends this month, with one in four workers in this age group, 2.5m in total, having been furloughed. Of those who were still working, 20 per cent were working fewer hours.

“Hundreds of thousands of these workers may be unable to return to their previous jobs as some sectors struggle to recover,” said the Centre for Ageing Better.

Advisers say over-50s who have been affected by the crisis are having to rapidly revise retirement plans.

Last month, the government announced its £2bn Kickstart scheme to help young people on universal credit, the main welfare benefit, back into work. But there was no similar intervention for over-50s, an age group that already suffers from employment discrimination.

“Older workers who find themselves unemployed as a result of Covid-19 are likely to find it much more difficult than other ages to get themselves another job,” said David Sinclair, director of the International Longevity Centre, a specialist think-tank.

“Without further support from government, a huge number of people aged over 50 will find early retirement forced on them.”