The COVID-19 pandemic has shaken the globe, including the 2021 retirement statistics!
It’s had an unprecedented impact on the modern world, with many looking for a plan B or C as a way to get by. Written forever in the history books, we live in a time where loss is common and financial turmoil is inevitable for massive groups of our population.
This, too, has put a massive strain on the British retirement community. The crash in the economy, job loss, and salary reductions has resulted in a staggering over 1 million UK residents postponing their retirement.
For many, gone are the days when you hang up your briefcase at 65, after spending 35 years at a reliable firm. Today’s picture is vastly different.
As experts in the financial sector, we’re here to show you that you’re statistically not alone. In addition, we’ll look at possible solutions, including an equity release, that could help you live a stress-free retirement, despite the impact of COVID-19.
Over 1 Million UK Citizens Affected
As of 2021, 1 in 5 UK over 50’s have said that as a result of COVID-19, they’ll need to postpone their retirement indefinitely. In other words, 20% of the population will not have the comfort of retirement when work is no longer an easy task.
In addition, over a 3rd of this group reported that they have lost an average of £500 in monthly income during these difficult times. While that may not be a massive amount of money for some, the pandemic1 has impacted the general standard of living. That’s £500 less to pay the identical bills you’ve always had while trying to maintain a particular lifestyle.
Of those affected, 1.45 million are in a position to forcibly postpone retirement by 3 years to get by in their golden years. That’s if they can maintain their job, based on the company policy and their age.
There is hope!
The great news is that things are getting better. It’s said that in the past 9 months, some individuals have managed to accumulate more income, allowing them to only delay their retirement by 2 instead of 3 years. Perhaps things will continue to improve with time.
5 Retirement Statistics for 2021
COVID-19 has dashed many retirement dreams.
With rising costs in the UK, many residents were already living ‘hand to mouth2’ before the pandemic. COVID-19 has worsened the situation, leaving more Britons facing challenging times. Some are in a position, as discussed above, where retirement seems like just a pipedream, while others are faced with early retirement due to unforeseen retrenchment3.
Either way, with savings becoming even harder than ever, and many burning through what they had during the pandemic, things are rough out there. Here are 5 fascinating 2021 retirement statistics:
- 680,000 Britons will reach retirement age in 2021.
- 12,000 UK citizens aged 60 to 65 fear that they’ll never retire.
- A massive amount of employees are now receiving 80% of their pre-COVID salaries.
- 124,000 over 50s lost their jobs in the UK in 2020.
- The aged 50 to 65 unemployment rate has increased by 55% since the start of the pandemic.
Already thinking about retirement? It’s never too late! With 1000’s Googling ‘how much money do I need to retire’ every month, it’s clear that citizens across the UK are considering the topic.
Increase Unemployment Amongst Older Briton’s
The COVID-19 pandemic has hit the older UK population hard, as evident in the latest unemployment statistics.
In addition, the country entered 2021 with a 4.6% increase in unemployment amongst all ages since the pandemic.
As of now, there are 407,000 unemployed over 50-s in the UK. This equates to 1 in 4 individuals and 24% of the total population in that age category.
Being an older member of the workforce is always challenging, let alone during a pandemic. There is evidence of discrimination for several reasons, including:
- At the age of 50 and older, you’re looking at 30+ years of work experience. Many firms cannot pay for such tenure or simply prefer to save some cash by hiring a younger model.
- There’s a perception that older folks aren’t technologically up to date, and younger employees will deliver a more modern approach.
- Younger managers may feel intimidated to have a more senior individual on their staff.
- During COVID-19, countless businesses decreased revenue, putting their companies on hiring freezes or hiring cheaper staff. Experienced staff members would, therefore, be overlooked to fill crucial roles.
Early retirement due to COVID-19 can result from downsizing, bankruptcy4, or liquidation of your employer and finding a new job is tricky due to the reasons above.
The question is, what’s next?
Could Equity Release Be The Solution?
While some may not be so lucky, 55.9% of homeowners in the UK are over 55-years-old. If you’re facing unemployment due to COVID-19, but you own your home, equity release could be the answer you’ve been looking for.
In addition, if you have a job, but income loss means it’s almost impossible for you to retire, you could potentially do so with equity release.
In a nutshell, equity release is a financial product that allows you to unlock the cash tied into your home if you’re over the age of 55.
This can be done through a lifetime mortgage or a home reversion scheme.
With a lifetime mortgage, you’ll take out a loan against the value of your home while still retaining 100% ownership of your property. In addition, you get to stay there until you die or move into long-term care.
In the case of a home reversion scheme, you sell all or a percentage of your property to a lender under market value, but once again, you get to stay at home for life.
In both instances, the loan, plus interest, is paid back to your equity release lender when you pass away or home into permanent care.
With equity release, you could be in a position where you retire on time, early, or supplement lost income during these difficult times.
9 Ideas to Help Boost Your Pension
Whether you own your property or not, you have some options to aid in retirement at a reasonable age. Here are 9 ideas to help inspire your choices.
An RIO mortgage is quite similar to an equity release or lifetime mortgage. While there are no payments required with a lifetime mortgage, you will be required to make monthly interest repayments with an RIO. The loan is eventually settled from the sale of your home when you pass away or move into permanent care.
Pensioner Benefits and Discounts
While these aren’t forms of income pre-say, you can maintain some of the pleasures in life through retirement benefits or discounts. Have a look for retirement specials in your local community and see if your favourite restaurants or galleries offer discounts or reduced fees for people over 65.
Whether you own or rent your house, you might not need as much space once the kids have moved out. You should consider moving to a smaller or cheaper property. If you own your home, you can pocket the balance from the sale, and if you rent, you’ll benefit from reduced monthly payments.
Are you prone to unnecessary spending? Can you look at using a cheaper brand of butter? The truth is that every cent counts. Look at your overall monthly expenditure and see if there’s any way to reduce costs.
In addition, have a look at all your monthly subscriptions. You might be tied into something that automatically renews without your even realising it.
Assistance From Friends or Family
You raised them, and now they might be in a position to aid you. Don’t shy away from asking your children, friends and family for assistance. For all you know, they’ll be pleased to help.
Just make sure that both parties are clear on whether it’s a loan or a gift, so there’s no later confusion.
Have you ever heard of cryptocurrency? These days, investing can be done simply on an app. Ask younger family members for assistance or speak to your financial adviser.
In addition, you could consider investing in a new start-up business. There are loads of brilliant businessmen and women out there who would love a financial boost in return for a signed partnership agreement.
Starting a Business
Perhaps you’ve always had an idea for a dream business? Maybe now’s the time to make that dream a reality.
Starting your own business can be hard work, but the right business plan and marketing can pay off in the long run.
Do you own antiques or valuable jewellery? You could have valuables worth a goldmine for all you know. Speak to a trusted evaluator who can help determine the value of your assets.
Renting Out a Room
Renting out a room can be a fantastic way to bring in some retirement income. You’ll benefit from the company of tourists while pocketing some well-earned cash.
Ýou can register your home on Airbnb6. In addition, you can even lease one of the rooms out to a foreign exchange student over the summer, and under the government’s ‘Rent a Room Scheme7‘, you can easily earn up to £7,500 a year from a tenant before any tax is due on the proceeds.
Discover more: Equity Release Alternatives
Get Professional Financial Advice
You’re not alone when it comes to all things financial. There’s a myriad of free resources on the internet and in financial magazines. But, it’s worth investing in professional financial advice.
The idea of a financial adviser can be intimidating. There’s often a perception that they’re for rich people or cost a fortune.
The truth is that by having a professional on your team, you’re likely to save in the long run or even make more money than you would have. Amongst other things, an adviser can help you look at investment opportunities and mortgage solutions like equity release.
Don’t be scared to contact a local adviser. Many offer the first consultation free.
Pro tip: Ensure that your adviser is someone that you like and trust. You’ll be spending much time with them, and they’ll be guiding you throughout your financial future.
There’s no doubt that COVID-19 will be forever written in the history books, with over a million UK residents amongst the financial casualties across the globe. If you’re feeling the effects of the pandemic, remember that you’re not alone.
With the right financial advice and hard work, retirement doesn’t necessarily have to be just a pipe dream.