More than half of UK adults say pandemic has impacted retirement plans

  •  54% feel Covid has affected their retirement prospects, with those approaching mid-life feeling the biggest negative pressures on their retirement plans
  • Two in five UK adults (41%) say the pandemic has encouraged them to build more long-term savings
  • 37% plan to progress quicker with key life events as a result of the pandemic
  • However, 27% feel less comfortable about coping with unforeseen events than they did before

More than half (54%) of UK adults say the impact of the Covid-19 pandemic has affected their plans to retire, according to new research from Aviva.

The findings lay bare the polarising impact of the pandemic and its stop-start effect on people’s future plans. While some people envisage retiring earlier and have gained confidence about living comfortably once they retire, nearly one in five (18%) feel less secure about their financial future, peaking at more than one in four (27%) aged 35-44.

Across the generations, the 35-44 age group are the most likely (68%) to have felt some impact on their retirement plans from the pandemic. This has been positive for some, including one in ten who used lockdown to save more for their retirement.

But almost one in six people (14%) aged 35-44 antipate their retirement date may be pushed back, while 16% have lost confidence in their ability to live comfortably once they have retired.

Table 1: Impact of the pandemic and lockdown restrictions on people’s plans to retire

Positive impacts All 16-24 25-34 35-44 45-54 55+
I feel more secure about my financial future 10% 15% 16% 13% 8% 7%
I’ve been able to save more for retirement during lockdown 10% 11% 9% 10% 9% 10%
I am more confident about living comfortably once I’ve retired 7% 16% 8% 9% 4% 4%
I may retire earlier than planned 7% 10% 10% 8% 7% 4%
Negative impacts
I feel less secure about my financial future 18% 22% 21% 27% 19% 12%
I saved less for retirement during lockdown 12% 14% 16% 14% 12% 8%
I am less confident about being able to live comfortably once I’ve retired 12% 10% 15% 16% 13% 10%
My retirement may be pushed back 10% 12% 9% 14% 11% 7%
No impact 46% 33% 36% 32% 45% 62%

Pandemic has had profound effect on people’s priorities

Aviva’s findings show nearly three in five (59%) people feel the pandemic has made them question what’s important in life, while half have said it has changed their priorities.

However, the research reveals a nation polarised when it comes to deciding its own destiny. While 41% say the pandemic has made them feel they can take more control of their priorities, the same proportion (41%) say they have less control than they did before.

When it comes to their finances, more than two in five UK adults (41%) say life during Covid-19 has encouraged them to build more long-term savings. People aged 35-44 are most likely to feel compelled to save more for their futures (54%), followed by 51% of those aged 25-34.

However, 27% overall say they feel less comfortable about coping with unforeseen events than they did before the pandemic. This includes 29% of those aged 44-54 and 24% of over 55s.

Stop/start plans hang in the balance

Aviva’s findings also show more than half (53%) of UK adults have suspended or cancelled a planned life event during the pandemic.

Among those affected, almost one in six (16%) have held back from starting a new job; 13% have postponed buying a new house; 12% have thought twice about starting a new business; one in ten (10%) have pressed pause on trying for a baby; and the same (10%) have postponed getting married.

Despite more than half (54%) of people feeling that life has been “put on hold” during the pandemic, many are now seeking to progress quicker with their future ambitions.  Among this group, 19% are fast-tracking a move to a new job; 13% will start a new business; and 13% are trying for a baby.

Alistair McQueen, Head of Savings & Retirement at Aviva, comments:

“For many of us, the pandemic has had a profound impact on our outlook and caused us to look again at our priorities. The experience of a global health crisis has led many people to put plans on hold and consider the wider implications around significant issues like retirement plans.

“The experience of having decisions taken out of our hands through successive lockdowns has left many people longing for a sense of control. But much as it’s encouraging to see people striving to build more long-term savings, our findings show anxiety about the future is still weighing heavily on their minds.

“As we all juggle personal priorities against a backdrop of uncertainty, it’s important to look for steps that can help us take control of our circumstances as best we can. Through practical guidance on decision-making and tools like our Mid-Life MOT app, Aviva is committed to help people put plans into action and keep life on track for the future they aspire to.”

About Lisa Baker, Editor 2423 Articles
Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.