The current economic downturn is likely to prompt many people of all age groups to reassess their plans and look for ways to help alleviate financial strain intensified by the pandemic.
Those aged 35-44 (25%) are least likely to be taking action to improve their retirement finances, the research shows. This compares with 14% of consumers aged 18-24, the lowest percentage of any age category.
The findings come despite widespread concern that many people will struggle to fund their needs in later life. Those non-retired and aged 35-44 are most concerned about their level of retirement finances (66%), followed by those non-retired and aged 45-54 (59%), suggesting that transitioning from ‘mid-life’ to ‘retirement’ may become even more challenging for the next generation of retirees.
Only one in ten (11%) people aged 45-60 are planning to increase their pension contributions in the future, although more than one in six (17%) in this age group have said they think will need to work for at least six months or more past their retirement date, or they cannot see a situation where they can think about a retirement date.
Aviva research also suggests that self-employed workers are less likely to prepare for their retirement, with almost one in four (23%) not taking steps to ensure they have adequate income for later life. This compares to 13% of those in full-time work.
Alistair McQueen, Head of Savings and Retirement at Aviva, said: “The high levels of uncertainty caused by the coronavirus pandemic are likely to prompt many people to urgently assess their financial outlook on the journey through mid-life to retirement.
“Although uncertainty can be unsettling, people can seek reassurance by taking steps to better understand their current position and identify practical ways to tackle the challenge ahead.
"Even small, incremental improvements to savings habits can improve long-term prospects and ease financial stress where possible.
“Some groups have been particularly hard hit by the pandemic, and even before coronavirus, self-employed workers often struggled to save for retirement due to the often uncertain nature of their employment. It is vital we do all we can to support them, including addressing the need for tailored financial guidance.
“Measures like Aviva’s mid-life MOT programme for employees, and the Pensions Advisory Service’s mid-life review for the self-employed are important sources of guidance and planning tools at a critical phase of life.
"Collectively, there has never been a more important time for businesses and government to work together to help people with planning for their futures."
Tips to improve your retirement outlook
Although many UK households are faced with increased financial pressure, there are simple steps people can take to help with making plans for later life:
Estimate your future income needs: Understanding the level of income you will require to maintain living standards in retirement will help you identify how much you will need to save, acting as an incentive to put money aside each month
Request a free state pension forecast: This will give you visibility over how much your state pension is worth, when you can access it and offer guidance on how to increase its value
Understand your current savings and projected retirement fund: Identifying how much your exact level of current savings and monthly saving contributions will leave you with in retirement can help you adapt your long-term financial goals
Consider the impact of saving more or retiring later: Being honest with yourself and understanding that saving less will come at the cost of having to retire at a later age. This could act as a catalyst to change your short term spending habits to support your long term financial position
Take control on your own or with the help of a financial adviser: If you are able to, accessing regulated financial advice will give you more confidence to plan your financial future.
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