The pandemic has cost us dearly in emotional and health terms during the past year. But what is the true financial cost of the pandemic for people over 50?
New research from insurer SunLife has found that 27% of over 50s are worse off due to the pandemic, by an average of £445 a month.
This is equivalent to £3 billion per month, on a national basis, totalling £33.2 billion since the onset of the pandemic last March.
For those over 50s who are working, 46% experienced a negative impact on their jobs and income, with 12% losing their jobs, 28% being furloughed, and 31% having their hours or pay cut.
Over 50s working in the hospitality and entertainment sectors experienced an even worse job picture, with 78% negatively affected, including 17% who lost their job.
The self-employed over 50s were also particularly affected by the pandemic, with 67% experiencing a negative impact on their business.
14% said they cannot operate at all at the moment, with 45% reducing the hours they are working, and 6% shutting down their businesses entirely.
According to the research, 51% of working over 50s have a private pension pot. Looking at those who were making pension contributions before the pandemic started, 5% have either stopped those contributions or reduced the amount they are paying in.
For those over 50s who were already retired but still contributing to a private pension, 10% reduced their contributions or stopped them entirely during the pandemic.
Overall, 11% of retired and working over 50s have either stopped or reduced their pension contributions as a result of the pandemic.
Before the pandemic started, over 50s were contributing, on average, £123 a month into their pension pots. This average level of pension contribution has now reduced to £72 a month.
Canada Life calculated that for a 50 year old who plans to retire at 68, reducing a monthly pension contribution by this much will result in an £11,016 smaller pension pot at retirement.
The research identified some positive news for the over 50s too.
10% said they are better off financially as a result of the pandemic, mostly because they are spending less money.
Justin Cole, director at SunLife, said:
“The pandemic has been tough, financially, for so many, and our research shows that for older people who were either self-employed or working in one of those ‘at risk’ industries like retail, hospitality or entertainment at the start of the pandemic, it has been particularly hard.”
It’s never too early to be planning for financial independence; it is far better to be prepared than to need to be repaired. This is why having a comprehensive wealth plan, that has your desired lifestyle at its core, will ensure you can visualise what your financial future could look like. It can help you to be less anxious about tomorrow, as well as give you the certainty to know you can secure all that you value.
As always please get in contact if you have any questions.