The downturn has put a serious dent in the retirement prospects of many. According to a recent report by the Equity Release Council, homeowners are more worried about a variety of money-related problems than they were prior to the pandemic. These concerns are felt more keenly by women, of whom 48% worry that they’ll run out money during retirement, and whose pension pots can be up to 40% smaller than those of men. But both sexes have felt an increase in anxiety.
Much of the gap in savings might be explained by the types of job that women do. As Will Hale, the CEO at Key equity release, says, “Women who are disproportionately represented in hard-hit industries like hospitality and retail are already finding that their lower average salaries mean they are more financially vulnerable in retirement but both genders have been hit and are concerned about the future.”
Money Worries
In quarter four of 2019, around 39% of retirees worry that they might fall ill, and be forced to pay for their own specialised healthcare. It’s probably unsurprising that health concerns have proliferated during the pandemic. There’s been some positive vaccine news recently, which may go some way to assuaging these concerns – but we should remember that not all ill health is a result of a novel coronavirus.
The Pandemic’s Impact on Savings
34% are now worried about money in general, compared with 27% last year. An incredible 90,000 people over the age of fifty were made redundant during a three-month period between June and September last year. The loss of income will seriously undermine a would-be retirees ability to save. 12% of women over 55, and 8% of men, have stopped saving altogether. There’s also been a related upsurge in worry about having to sell the house, up from 18% in 2019 to 24% in 2020.
How are we behaving differently?
Of course, some of these worries have created a change in behaviour. 14% have stopped saving entirely because they can’t afford to; 7% have decided to stop in order to support family and friends. 9% have postponed their retirement plans (interestingly, this is the one trend that’s more keenly felt by men than by women, despite the saving’s gap.).
Hale recommends a holistic, pragmatic approach to savings. “Now more than ever it is important to take a holistic look at retirement finances and ensure that you are using all your assets to their full potential. For most over-55s, their home is worth more than their workplace pension so it is vital that this potential source of financial support in retirement is fully considered.”
