Nearly a third of Britons (29 per cent) now fear an economic crash could hamper their retirement plans, according to a new survey by Sanlam.
Nearly a third of Britons (29 per cent) now fear an economic crash could hamper their retirement plans, according to a new survey by Sanlam.The figure marks a significant annual rise of 45 per cent in the number of people who now believe a serious downturn to be the biggest threat to their retirement goals (up from 20 per cent in 2019).
When asked the same question in 2019, illness was cited as the biggest barrier among those surveyed (21 per cent) but is now a concern for only 14 per cent of respondents.
The results come amid the Coronavirus outbreak and sharp stock market falls which has brought the UK economy to a halt and shaken people’s confidence in their ability to save.
Those approaching retirement aged 55-64 were the most concerned about the impact of an economic crash on their ability to hit their retirement goals. More than a third (34 per cent) fear a crash is the biggest barrier to their plans, up from just a fifth (22 per cent) in 2019.
The survey also found that more people are struggling to save enough on a monthly basis, with a quarter (25 per cent) saying this was a barrier to achieving their retirement goals today, up from 19 per cent last year.
An economic crash meanwhile, tops what men consider to be the biggest barrier to achieving their retirement goals with a third of (33 per cent) citing it as a concern compared to just under a quarter of women (24 per cent). Struggling to save on a monthly basis was women’s biggest barrier to saving for retirement (28 per cent). Only 22 per cent of men cited this as a barrier.
In addition, one in five Brits (19 per cent) are not confident they will achieve the savings they need to retire when they want to while the proportion of those who said they are confident has fallen to less than half of Brits, down from 56 per cent in 2019 to 48 per cent today – a 14 per cent decrease.
John White, CEO, Sanlam‘s wealth division, says: “The outbreak of the Coronavirus and the subsequent public lockdown has shaken the UK economy to its core and our survey reveals the very real long-term financial concerns people now face. The sharp market falls we witnessed in March have alerted people to the damage an economic crash could wreak on pension pots, and understandably more people now fear that a wider, continued downturn could derail plans to retire when they want to. It is unnerving to watch the value of hard-earned savings take such a hit, particularly if this pot is not as large as it perhaps could be to sustain the kind of lifestyle many may seek once they give up work.
“If this crisis has proven anything, it is that it pays to be prepared. Steady savings are key to ensuring people can leave work when they want to and enjoy a comfortable retirement. We urge people to seek out expert financial advice if they are worried about what the future holds and what a struggling economy could mean for their ability to hit their retirement goals. Most importantly, people should prioritise saving sooner, rather than later, if they are able.”