Will we ever retire? 2.6m over 50s on track to work ‘indefinitely’

Around 2.6million people over 50 in Britain expect to have to keep working ‘indefinitely’ as a result of the pandemic’s impact on their finances, new findings claim.

With the Covid-19 outbreak hitting many workers hard, new research by Legal and General suggests there are 429,000 unemployed over 50s in Britain, comprising one in four of all unemployed people.

L&G’s latest research suggests that 1.45million people over 50 now plan to delay their retirement by about three years.

Hard graft: Around 2.6m people over 50 in Britain expect to have to keep working ‘indefinitely’ as a result of the pandemic

Over a third of the people who believe they need to delay their retirement reported an average monthly drop in income of £500 since the pandemic started.

‘This is approximately 20% 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 made (£400)’, L&G added.

Conversely, some over 50s have been able to benefit financially during the pandemic. One in ten people surveyed said they now expect to be able to retire two years earlier than initially planned. 

In a sign of how much the financial impact of the pandemic has varied from person-to-person, 13 per cent said they are now saving more towards their retirement, while 13 per cent said they were saving less for their retirement than before the pandemic. 

Those over 50s saving more for retirement are squirreling away an extra £335 a month, while those saving less have had to reduce their retirement savings by around £230 a month, L&G said.

What will you do? L&G said further ‘income inequality’ had become apparent during lockdown

Andrew Kail, chief executive of L&G Retail Retirement, said: ‘One year on from the first national lockdown, we are starting to get a clear picture of the long-term financial impact of the pandemic.

‘Across the board, we are seeing increasing evidence of income inequality. 

‘On the one hand we have seen the number of people on Universal Credit double, while others have seen their savings reach new highs, according to the Bank of England. 

‘As our research shows, for the older generation that has prompted some people to take early retirement, while some are left questioning whether they will have to stay in work indefinitely.’

Mr Kail stressed that the pre-retirement years can have ‘long-lasting repercussions’, particularly for people who have stopped saving towards retirement. 

For people over 50 worrying about their retirement funds, Mr Kail said it was crucial they have a clear understanding of what is in their pension pots and what other assets, like property, are on hand to boost their income at the point they stop work.

The minimum age people can access cash from their private pensions is rising from 55 to 57 in 2028. At present, people aged over 55 or above can access their retirement funds. 

In his latest Budget, Chancellor Rishi Sunak announced that the pensions lifetime allowance will be frozen at £1,073,100 until April 2026. 

But, he left the triple lock guarantee for state pensions alone and revealed that the state pension will increase by 2.5 per cent from 6 April this year.