The pandemic has had a notable impact, not just on the everyday lives of consumers and their financial situation, but also their mindset when it comes to retirement plans. At the same time, the latest analysis from Moneyfacts reveals that annuity income has failed to make a significant improvement since the pandemic struck, which could deter retirees.
Alternative research suggests consumers may delay their plans to retire, perhaps to build larger provisions.
- Moneyfacts.co.uk data shows that annuity income has struggled to make a noteworthy improvement during the pandemic, seeing a marginal rise year-on-year of £86, as average yearly income now stands at £2,357, up from £2,271 in May 2020. However, before the pandemic struck in May 2019, yearly income was £2,516 – so today, retirees get £159 less on average.
- The pandemic has pushed consumers to consider retiring later than planned. One in three (35%) 41-54-year-olds plan to delay by 16 months and two-thirds (67%) of those aged 18-23 may delay by two years on average, according to PensionBee.
- More than half (56%) of people retiring in 2021 don’t plan on giving up work completely, according to new research from Standard Life Aberdeen.
- Pensioners continue to dip into their retirement funds, as £2.6 billion was drawn out of pots under pension freedoms during Q1 2021, a rise of 6% year-on-year from £2.5 billion, according to HMRC.