The Covid Pensions Gap: How the Pandemic Has Destroyed Later Life Plans
According to Legal and General Retail Retirement (LGRR), 1.4 million over-50s workers are saving £155 less per month for their retirement.
As they count the hole Covid-19 has punched in both their budgets and later life plans, savers have been forced to revisit their retirement planning and long-term care plans.
After seeing how Covid-19 had spread in care homes, the LV Wealth and Wellbeing Monitor, which polls over 4,000 UK adults every three months, found that 60%, or 31.6 million UK adults, were concerned about moving into one.
The over-55s were the most concerned, with 70% of those with assets between £100,000 and £5 million – the so-called mass affluent – adamant about staying in their own homes.
Legal and General Retail Retirement (LGRR) warned that 1.4 million over-50s workers were saving £155 less per month for their pension, though this was less severe than the average of £200 per month at the height of the pandemic.
According to LandG, the payment reduction could cause a four-year delay in retirement.
Women are the ones who are most likely to face a shortage.
According to More2life’s research, the gender gap is widening, with an average of £183,936 in 2021, up £26,673 from 2020.
According to the provider, women must work an average of 54.5 years to save the same amount of money for retirement as men do in 40 years, and 30% of women reported that their financial situation has worsened since the pandemic began, compared to only 24% of men.
Consequently, while men over 55 have or expect to have annual retirement incomes of £20,712, women will receive around £14,964.
LGRR has partnered with The Open University to offer a ‘Spend a Day’ retirement course.
Savers could make up the shortfall by paying an extra £41 per month into their pension, according to LGRS managing director Emma Byron.
“As we prepare for a period of recovery, the best thing people can do is set aside a day to sort through their affairs and better understand the options available to them.”
We have a number of resources available, including a free online course that can be completed in just a few hours.
UK news summary from Infosurhoy
The Covid Pensions Gap: How the Pandemic Has Destroyed Your Retirement Plans
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Covid pensions gap: How the pandemic has thrown later life plans into disarray
Lifetime mortgage customer Patrick Buckingham, 82, released £100,000 from his five-bedroom house near Warwick in 2017.
My wife, Ausma, sadly passed away, aged 78, in 2018. I did have a lifetime mortgage with more2Life but I noticed Responsible Lending had a lower rate which would save me £16,800 over eight years.
Patrick, who worked for Land Rover Group for 45 years, said: “I aim to go on a world cruise every year but I didn’t need a lifetime mortgage to pay for my holidays or living expenses. I have always used my money wisely and I wanted to release some cash to help pay for house deposits for my grandchildren. I knew this would also have the added advantage that my family would avoid paying quite so much inheritance tax in due course.
“I always planned to use this property as part of my retirement plan. had it in my mind that, if it came down to it, I could sell my house and turn it into cash to live on. In the end, I haven’t needed to do that but the lifetime mortgage has still allowed me to free up some money without having to downsize.
“I’d always read the financial pages of the newspapers every day and it’s fair to say I’m always someone who seeks financial value. I managed to get my rate down from 3.90 per cent to 2.27 per cent and I was delighted.
“The new rate is saving me about £140 a month. Over 25 or 30 years, that is a significant amountof money.”
imoney, in association with Age Partnership, a whole-of-market independent financial advice firm specialising in
money matters for the older generation, has created a free guide for those considering equity release. To request your free copy, call 0808 239 1913 or visit inews.co.uk/