We all work hard to support the ones we love the most in our lives. Yet, when it comes to retirement, we are working to accomplish some of our own dreams. Whether you want to travel, spend more time with your family or take up a new hobby, we all have our own goals for our retirement. No matter what way you want to spend your retirement, everyone deserves a little happiness after working so hard.
However, there are new challenges being faced by those going into retirement. We are all living and working a lot longer than ever. It has become apparent that the retirement landscape has changed in the last couple of years. Not to mention the impact that COVID-19 may have on retirement in both the short and long term.
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What is this report about?
Conducted in December 2020 this report takes an extensive look at some of the factors that will have and have had an impact on the landscape of retirement in the UK. This report not only considers some important economic factors, but it also looks at what people now want from their own retirement and what intentions they have for it.
The research in this study was collated from a nationally representative survey of 1,513 Brits who were aged over 50 and had plans to retire. The research was conducted by Censuswide on behalf of British Seniors Insurance Agency. This report provides a snapshot of some of the challenges facing people in the UK who are coming into retirement in the next couple of years.
The people who are now approaching retirement age have faced a lot of economic challenges having now lived through as many as five recessions. For many retirees in 2021, there is something of a balancing act needed between securing the costs of living while at the same time saving enough money to provide for their retirement. All of these challenges are coming amidst unprecedented times for society in the UK.
The state of retirement in the UK
Despite these kinds of challenges, a great many people have clear intentions about how they want to spend their retirement years. It is no surprise to see that 46% of us Brits who are over 50 are looking forward to spending time travelling during retirement. This is followed by 33% of us wanting to spend time on a current or new hobby, along with 31% of us wanting to spend time with family.
These goals seem to align with a more traditional view of retirement. Yet, despite this, there are still many people who are not ready to give up on working. About 31% of us over 50s are planning to remain in work after retirement.
One of the more striking things in the research was the apparent gender gap in retirement. There was a significant difference between men and women on how prepared they are for retirement. The study found that men were three times more likely to be better prepared for a more ‘comfortable’ retirement. In fact, men's retirement pots were 82% larger than women’s based on the average value of pension pots and total savings.
The challenges facing retirement
We are now more conscious than ever of how outside forces can affect our retirement plans. No other external force has served to shake that confidence more than the COVID-19 pandemic. Going beyond the prospect of retirement, it has forced everyone in the UK to reconsider their plans for almost everything. It’s no surprise then that 57% of over 50s believe it will have an impact on their retirement.
While this is undoubtedly a big force for change, when it comes to retirement there are other factors that people are now facing up to. A substantial proportion of us is now facing some of the financial realities of retirement. According to our survey, 27% of us are worried about the lack of pension growth. As a result of this concern and external factors, 48% of people don’t think they’ll be able to retire by state pension age.
The impact of COVID-19 on retirement
As we have mentioned it seems like there is no part of our lives that the pandemic has not touched. Retirement really is no exception and there have been both positive and negative implications. The pandemic has made people reconsider when they would like to retire. For some, it was a case of considering retirement earlier than they had planned. This can come because of losing their job (16%), their concerns about their health (28%) or wanting to spend more time with their family (54%). However, for around 78% of people who feel COVID-19 will impact their retirement, it will be a case of delaying it even further. As expected, some of the biggest implications of COVID-19 come from financial considerations.
One of the biggest disparities seen in the report is the difference between people’s aspirations and the financial realities of retiring. No matter what we have planned with our retirement there is one thing that we all need: funding. According to our research more than a third (34%) of over 50s in the UK have less than £50,000 in total pension savings. There is also a huge divide between the regions in the UK and retirement readiness. The report found that 68% of over 50s in the South East of the UK say that they’ll enjoy a comfortable retirement whilst only 20% say the same in Wales.
Getting retirement ready
The retirement landscape in the UK is currently undergoing massive changes. We are seeing a big shift in what it takes to work towards a comfortable retirement for ourselves. While traditional goals for retirement have not changed that much, the circumstances in which we can retire are shifting. Like with any stage of your life there can be unexpected costs such as the cost of a funeral. These kinds of costs can put pressure on your loved ones. However, there are steps you can take to help you financially protect those you care about most.
We all want to look forward to a relaxing retirement filled with happiness and fulfilment. Something that could help give you some peace of mind is over 50s life insurance. With British Seniors, you could take out a policy for a small amount each month and settle into retirement with the knowledge that if the worst were to happen, you have some protection in place for those you love most.
For a more detailed look at all of the research and findings of the report, you can download the full pdf at the top of this article. It is only natural to be worried about the future but staying informed and aware of your options can help to put your mind at ease.