As the government’s furlough scheme comes to an end this month, new research from Canada Life revealed that 46% of currently furloughed workers have altered their retirement plans.
According to the survey, 36% of the respondents plan to retire at the same time as previously planned. However, 28% of workers of furlough plan to retire later, while 19% plan to retire earlier than initially planned and 18% remain undecided.
When compared to their younger counterparts, those aged over 55 appear less worried about furlough’s impact on their retirement plans.
Being furloughed due to the pandemic changed the retirement plans of 53% of 18-34-year olds, compared to 34% of over 55s. Just over 10% of the over 55s on furlough now plan to retire later than planned, compared to 35% of 18-34-year olds. On the other hand, furlough and the pandemic have accelerated retirement plans for 23% of over 55s who plan to retire early, compared to 18% of 18-34-year olds.
The pandemic has significantly impacted people’s finances, resulting in 9% of over 55s accessing their pensions while on furlough to get by. In addition, 7% of those over 55 have flexibly accessed their pensions, using both their tax-free cash and drawing down additional sums. This triggers the Money Purchase Annual Allowance, which caps any subsequent tax-efficient savings at £4,000 a year. Yet, 13% of the over 55s still plan to make additional savings or top up their pensions once the furlough scheme ends.
If you’re currently looking into your workplace pensions or personal plans, we can help make sense of your options here at Cornerstone Finance. Our sister company Imperial Chartered are Independent, Whole of Market financial advisers that specialise in all aspect of pension & retirement planning.
Pension planning can provide significant benefits in the long-term and good financial advice can help you plan for the retirement you want. Not only can financial advice help you to plan for your future, but it can also help you avoid the many pitfalls when dealing with your finances.
To find out more about pensions and investment, feel free to get in touch.