Will coronavirus result in older workers retiring early?

One in three over-55s would retire early if made redundant during the Covid-19 crisis, amid signs the pandemic is making people reassess their health and working life.

But some 36 per cent of older workers would still look for another job if laid off in the next year because they need the money, while 15 per cent would do so because they like working, and 5 per cent would set up their own business.

The findings of the poll of 1,000 over-55s carried out by Standard Life came as a separate study revealed Covid-19 could be encouraging millions to consider retiring sooner than planned.

Working from home: Many people are reconsidering career and retirement plans during crisis

Working from home: Many people are reconsidering career and retirement plans during crisis

Working from home: Many people are reconsidering career and retirement plans during crisis

Just 51 per cent of UK adults plan to work beyond the age when they can draw their state pension – which has now risen to 66 – a substantial fall from 71 per cent at this time last year, according to a larger survey of 2,000 people by Canada Life. 

‘This is the first year the number of people planning to work beyond state pension age has fallen since Canada Life’s research began in 2015,’ says the insurer, which blames the pandemic.

>>>How to sort out your pension: What should you do if you are strapped for cash?

‘With health issues brought on by the virus and an increase in unemployment and redundancy, Covid-19 is seemingly accelerating retirement plans and potentially encouraging more people to stop working when they hit 66.’

But it is difficult to determine a clear-cut trend in people’s retirement planning in the midst of the crisis.

This is Money recently reported that hardship caused by the pandemic is forcing many older people to delay retirement, while they are also assisting younger generations with money and childcare.  

Standard Life found that 38 per cent of over-55s, an estimated 5.8million people, are more worried about their job security due to the pandemic,

Some 52 per cent of Londoners are concerned about redundancy, as are 45 per cent of people in the South and 42 per cent in the North West.

Those in the South West are the least worried, with 27 per cent anxious about losing their jobs.

Standard Life found 65 per cent of over-55s have no plans to pay for financial advice to get help with the impact of Covid-19 on their retirement plans, some 9 per cent have turned to an existing adviser for extra guidance.

John Tait, a retirement planning specialist at Standard Life, says: ‘While support measures have been put in place to curb unemployment, we’ve regrettably seen a raft of redundancy announcements as a result of Covid-19 with huge speculation that more announcements will follow in the months ahead.

‘Those nearing retirement are understandably feeling particularly concerned about job security and are looking for reassurance and support when it comes to saving for the future.

‘While the process can feel daunting, there are a series of steps people can take to adapt their plan. 

‘The best place to start is pulling together a view of all their potential retirement incomes, pension pots and savings.’ See the box below on how to sort out your pension.

Paul Avis, a director at Canada Life, says: ‘For some older workers, the events of 2020 have helped them realise they want to spend more time at home, with their families and learning new skills and hobbies.

‘For others, poor health and vulnerability may – sadly – have accelerated their retirement plans.

‘While unemployment continues to rise, job losses may be another contributing factor to this drop in the number of people planning on working beyond retirement age, especially for those receiving or expecting redundancy payments.’

What should you do about your pension if you are strapped for cash?

Pension experts urge people to keep paying into pensions if they can afford it, to avoid harming their chances of a decent retirement.

Find out the three important rules to remember, and the options for what to do about different types of pension here. 

You can keep paying in to some types of pensions even if you have left your employer, and payments into pots based on 80% of salary are protected if you were furloughed. 

Read a 10-step guide to sorting out your pension here. We also have tips for people in their 20s wanting to get their pensions on track here, and help for older savers nearing retirement here. 

TOP SIPPS FOR DIY PENSION INVESTORS

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