2020 – we have never seen a year like it. The impact of COVID has been far-reaching, unexpected and worrying for many of us. For example, it seems one in eight older workers (13%) have already changed their planned retirement age as a result of the coronavirus pandemic.
Not surprisingly, many people are now planning to retire later than they had previously intended. Perhaps a pension fund has fallen in value, which means planning to work for longer to make up for a fall in their wealth, while others want to do so because new working practices make staying in work easier or more appealing.
Is early retirement beckoning?
But, according to a survey from the Institute of Fiscal Studies**, some 5% of over 50s are actually planning to retire earlier than they had previously intended.
Rowena Crawford, an Associate Director at IFS, said:
The current pandemic risks having serious and long-term financial consequences for older workers, affecting living standards into and through retirement. The crisis has also been disruptive to major life plans, with one in eight older workers so far changing the age at which they planned to retire. On a positive note, those working from home are now more likely to be planning to retire later; suggesting changes to work practices could benefit some older workers.
Adopt the Retireista mindset
If you plan to work for longer, or throw the towel in earlier, the best advice is not to panic. The Retireista mindset can help you plan and face your post-work future with confidence.
It’s all about making life work for you when your conventional working life is over.
Check out our thoughts on the six fundamental building blocks to becoming a successful Retireista:
Our home is possibly the most important physical element in our lives. A change in our working habits can provide a chance to downsize, move from town to country (or vice versa) or even spread our wings abroad.
There’s a lot to think about and we have suggestions on some homework to do before making a move.
Now, more than ever, we are aware of how important it is to stay fit and well as we get a bit older. One positive benefit of Coronavirus is that a whole crop of online exercise and “virtual” classes mean we can start to shape up in our own front rooms!
Check out our ideas here
It’s never too early to plan ahead and nor is it too late to make some smart financial decisions.
We say: Be prepared and take expert advice.
Emily Andrews, Senior Evidence Manager at Centre for Ageing Better, said:
The coronavirus crisis has disrupted many people’s working lives in ways we couldn’t have imagined just a few months ago. There have been some silver linings – for example with more flexible working patterns allowing people to stay in work for longer. But it’s deeply worrying to see many people now planning to retire earlier than they intended – including many who are currently on furlough.
This has been a testing time for families – and for relationships with friends. We now know that social networks are vital in keeping our spirits up. Read our thoughts on how to nurture yours here
Suddenly found yourself with more time on your hands? Keeping busy and fulfilled is what being a Retireista is all about. Check out our suggestions on how to have fun!
Yes, travel is tricky at the moment. But that won’t be for ever. Planning the next staycation or bucket-lister is great fun and as a free agent (no more 9 to 5!), as Arthur Daley would say: “The world’s your lobster!”
Tony Colston, co-founder of the Retireista movement, says:
What COVID clearly highlights is the need to think about what you want from your future work life balance and how you can help to mould it into something that fits comfortably with your aspirations. There will always be ‘curve balls’ to pull you up short and make you reassess your plans, but one of the most exciting things to come out of the pandemic has been the individual creativity and ingenuity of many workers in adapting to the changing situation. Not everyone is fortunate enough to be able to do this, of course, and our hearts go out to them, but for those who can, life as a Retireista may help them to get the best out of what could be the best years of their lives.
Facts and figures
Key findings on the financial consequences of the coronavirus crisis for older adults include:
- A significant minority of older people working immediately before the crisis are now retired. That’s 6% of those aged 66–70 and 11% of those aged 71 and older. While some may have been planning to retire around this time anyway, this is not true of all.
- Many people who are clinically vulnerable to coronavirus have continued working outside their homes. This may be because they enjoy their work, because they do not perceive themselves to be at high risk, or because they cannot afford to stop work.
- Not all older individuals have wealth to help them weather income shocks. Among those whose income has fallen since the outbreak of the pandemic, 23% have household net financial wealth (that’s basically what you own minus what you owe) of less than £500 per person. In response to their falling incomes, 5% had drawn on pension savings, 4% had borrowed from a bank and 5% had borrowed from family or friends.
- Nearly 90% of retired respondents were not at all or not very worried about their future financial situation (sounds like they have the Retireista mindset cracked!) but among those in work, over one-third were at least somewhat worried. (Cramming up on how to be a successful Retireista could help them take control of the situation …) As you might expect, many of these concerns are strongly related to wealth, with just over half (52%) of the poorest fifth of the population worried about their future financial situation, compared with only just over one in ten of those in the wealthiest fifth.
**These are among the findings of two new briefing notes published by the Institute for Fiscal Studies (IFS) which have been funded by the Centre for Ageing Better (on older adults’ work activities and expectations) and by UK Research and Innovation (on the financial consequences of the crisis for older adults). The analysis draws on new data from the English Longitudinal Study of Ageing (ELSA) COVID-19 study. This specially conducted survey, made possible with funding from UK Research and Innovation, the US National Institute of Aging and a consortium of UK government departments, interviewed adults in their 50s and older in June–July 2020.