Pandemic spurs 154,00 to retire early

Over 154,000 people aged 55-64 have opted for early retirement due to the impact of the Coronavirus pandemic, according to a new report. The LV= Wealth and Wellbeing Monitor said over 154,000 people aged 55-64 have opted for early retirement because of redundancy and reduced income, a desire to reduce their risk of exposure to Coronavirus or that the pandemic has made them reassess their priorities in life. The LV= research among those who were still working at the start of 2020 revealed that 3% of those aged 55-64 have already taken early retirement due to the pandemic. The research also showed that 4% of those aged 55-64 have accessed some of their pensions savings to supplement their income because they have been made redundant or their earnings are reduced. The LV= research also highlighted that people are also unprepared for retirement. Of those surveyed, 86% of UK non-retired adults had not checked the value of their pensions in the past year. Amongst those planning to retire in the next five years, three quarters had not looked at their pension value in the last year. One in three (34%) of those surveyed who are planning to retire in the next five years were not confident they would have enough saved for a comfortable retirement. The latest figures from Moneyfacts.co.uk have also shown that those planning to retire may find themselves facing a retirement shortfall due to the impact of the pandemic. Average annuity income was minus 6.3% in 2020, a third consecutive year of falls. Pension fund growth fell to 4.8% in 2020, down from 14.4% in 2019. Recent figures from the Office of National Statistics have also indicated unemployment among people aged over 50 has been rising sharply since the start of Coronavirus pandemic. HMRC data shows consumers drew £2.3bn out of their pots under pension freedoms during the third quarter of last year. Clive Bolton, managing director of savings and retirement at LV=, said: “Early retirement is attractive for many people – but it can become a financial nightmare if it is forced on people without any planning because of redundancy or illness. “Your 50s are critical years for retirement planning because that is the age when many people’s earnings and pension contributions peak. Being forced to end a career before you planned will disrupt retirement plans. Many will opt for early retirement and accept a lower income in retirement while others will switch to lower paid work and delay their retirement.” LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in December 2020.

Pandemic spurs 154,00 to retire early

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