Pension warning as Britons may have to work an extra four years before retirement
State pension: Retirement age 'likely' to increase says expert
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Pension saving is just one of the important factors a person will need to consider before leaving work for retirement. After years of hard work, many people will be looking forward to their retirement, which can often provide the chance to explore new passions, and ultimately relax. However, due to the impacts of COVID-19, a study has shown, it is likely many will have to put off their departure from the workforce due to financial strains.
Research has shown the average retirement age is now 66, rather than the 64 years of age estimated in the past.
Millions of Britons are likely to be forced to put their retirement dreams to one side due to the financial effects of the recent pandemic.
But one financial expert has predicted the situation could be even worse than the study predicts.
Neil Moles, CEO of financial advice firm Progeny, has stated the true difference in retirement age could in fact be double what the study has suggested.
Commenting on the matter, he provided further insight into the issues many Britons could face.
He said: “We’re now well over a year into the pandemic, and the changes forced upon the country have led to an immediate rethink for many Brits when it comes to their finances and their future.
“Our study shows people are expecting to work for up to two years more, however, we could be looking at three, four or more years longer than this for many people.
“The long-term impacts of COVID are challenging to predict – particularly in a climate where the state pension age is continuing to increase.
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“If it takes 35 years to pay off the COVID debt, it means that those aged 18-30 could spend the majority of their working life contributing to this through taxation.”
Progeny has said half of those asked said they were concerned about supporting their family after they retire.
This is a 10 percent rise compared to the level of worry expressed at the start of the pandemic.
Indeed, with a third of Britons using or having been placed on one or more of the Government’s support schemes, whether that is furlough or SEISS, it is clear financial aid has been a necessity.
However, there still remains worry about the long-term financial future of the country, and what this could mean for ordinary Britons.
Mr Moles continued: “When it comes to further tax changes, the Government has pressed pause, which is quite right as we still do not know what the total cost of COVID is going to be.
“While I believe we will see tax rises and the introduction of new tax rises, what people need to be aware of now is the speed these taxes will hit us.
“Taxes will change, and at a faster pace, so the need to take financial advice will be more frequent.
“People need to keep ahead of these changes and make sure their finances are fit for purpose.”
Britons may wish to adjust their retirement plans according to their finances, but are encouraged to take financial advice if changing their pension.
In terms of pension saving, some may wish to keep their pension fully invested while drawing on other savings options if their retirement in delayed.
Regardless of when a person chooses to retire, the state pension can also be received at the current age of 66, providing financial support based on a person’s National Insurance contributions.
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