Cost of living crisis causing many to delay retirement plans

As many as 2.5 million pre-retirees may be forced to delay their retirement as a result of the cost-of-living crisis, according to a report from Legal & General Retail.

Its survey of over 2,000 older workers also estimates that 1.7 million will have to keep working indefinitely in either part-time (19%) or full-time (9%) roles.

Pre-retirees who plan to delay their retirement say they will need to push it back by almost three years on average, with nearly two thirds (64%) unable to afford the loss of income whilst costs are so high.

The cost-of-living crisis is just one of a series of setbacks that have seen pre-retirees reconsider their retirement plans, says Legal & General. The findings suggest that 46% of workers aged 55+ have had their plans impacted by external factors such as the pandemic, Brexit and rising living costs.

The survey found over one in seven pre-retirees (16%) are also presently looking for additional work in order to boost their income, and one in 10 (10%) are concerned about the stability of their job in light of the current economic conditions.

However, while a need for income remains a priority for many who plan to delay, a desire to stay in the workplace is also driving many people. Twenty six per cent said they were delaying their retirement because they enjoy their jobs (26%). A further one in four (25%) say they don’t feel ‘old’ enough to retire yet, while a fifth (20%) worry they will be bored if they retire.

Lorna Shah, Managing Director of Retail Retirement at Legal & General Retail, said: “Retirement isn’t a once and done decision. Before concluding their retirement needs to be delayed or forgotten indefinitely, I’d urge people to think about the role different products and assets can play and make use of the free, impartial support available offered by the likes of MoneyHelper and Citizens Advice Bureau. It’s crucial to have a strong understanding of the options available before making any long-term decisions.”

Meanwhile, while there still remain many vacancies across the labour market, despite a fall in recent months, the number of redundancies are rising as the recession continues, according to new figures from the Office for National Statistics.

A report out today shows the number of potential redundancies reported in the week to 4th December 2022 was 71% above the level in the equivalent week of 2021, while the number of employers proposing redundancies increased by 112% compared with the level in the equivalent week of 2021. The ONS says that, while the redundancy rate has increased, it remains low, with 2021 figures reflecting the impact of Covid.

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