Two shocking and contrasting new reports show how the nation has been divided during Covid, with many of those in work saving more, while many are being forced to delay retirement.
First, the bad news.
A big number of senior workers are in fact delaying their retirement due to COVID-19 according to a new report by Close Brothers.
A survey carried out earlier in the year with 2,000 UK-based employees found that just under 1 in 5 of workers aged between 65-74 and one in 7 aged between 55-64 have been forced to change their plans.
The upside to this is that many employees are now making changes to their savings plans to make them more resilient in the future – including 38% of people aged between 65-74 and 43% aged 55-64.
Janet Markings, Head of Financial Education said: “COVID 19 has vastly impacted financial health in a great number of ways, with some suffering terrible hardship, some having to delay long-held plans and others truly benefitting and adding to savings.
“Understanding financial health of employees is crucial, & knowing those that require most help, has to be the starting point to ensure that an effective, inclusive and targeted financial wellbeing programme is put in place.
Now for the good news!
According to an online bank, cash savings rocketed last year, despite record low bank interest rates.
£180bn has been added to deposits over the last year, whilst instant access accounts are offering an average return of just 0.05% – a record low. The bank’s analysis suggests this particular boom represents a whopping £131bn more than would have been predicted prior to Covid-19.
Adrian McDonough, Head of Retirement & Savings at the bank pointed out that: “Headline CPI inflation today is at 0.4%, so all of the the millions of savers who are hanging on to cash in their standard current accounts risk losing money each month.”
How are your retirement plans working out for you?
Whether you have personally had a good year financially, or have struggled to keep your pension savings afloat, now may well be the perfect time to check that your retirement plan is going in the right direction – and that your cash is in the best possible place it can be. As always, get professional pension advice from you IFA.