Nearly one in five (19%) employees aged between 65-74 have delayed their retirement as a result of the pandemic according to new research from Close Brothers. The figure among those aged 55-64 is also hugely worrying with 14% having had to make the same decision.
The report, ‘Expecting the unexpected: a spotlight on preparing for a crisis’, highlights the extent to which the past 12 months have changed the financial plans of employees across the UK. These figures correlate closely with further findings from the report around the number of employees that have an accessible savings pot for emergencies. A fifth (20%) of those employees approaching retirement age (over 65s) admit to not having an accessible savings fund for such an occasion.
Despite this, just 5% of those employees aged 65-74 recognise that they were financially unprepared for the Coronavirus crisis and subsequent lockdown that followed in March 2020. This figure more than triples to 16% among the 55-64 age group.
Looking at all employees, one in five (19%) workers in large organisations say explicitly they were financially unprepared for the COVID crisis. Younger workers were also found to be much less prepared than their older co-workers – 24% of those aged 18-34 admitted to being unprepared, the figure was half that (13%) among those aged 55+.
Many employees have been reflecting on what changes can be made to improve their level of financial preparedness and appear to be determined to build back bolder and more resilient. Nearly two in five (38%) in the 65-74 bracket either already have or plan to make changes to their financial preparedness, and 43% of those aged 55-64. This is, however, notably lower than the average which sees three in ten (30%) workers in large organisations having already made some changes to improve their financial preparedness, with a further quarter (26%) are planning on making changes to improve theirs. Younger workers are much more likely to have made a change or plan to make a change to their financial preparedness, our research finding it to be the case with nearly three quarters (73%) of 18-34 year olds.
This is already translating into greater confidence. A third of UK workers are more confident about weathering a fresh financial storm compared to before the pandemic (30%), rising to 33% among 65-74 year old s and 36% among those aged 18-34.
But what is very clear is that, as employers start to come to grips with the shape of their workforce, with the UK tentatively emerging from the third lockdown, there is likely to be a lot of rebuilding to get back to pre-coronavirus levels as well as adjusting to whatever the new world looks like.
Jeanette Makings, Head of Financial Education at Close Brothers comments: “The COVID-19 pandemic risks being a ‘sliding doors’ moment for UK employees and their employers. It has impacted financial health in a multitude of ways, with some suffering hardship, some having to postpone long held plans and others benefitting and adding to savings.
“At the forefront of those best able to help employees improve their financial health are their employers; they are trusted, they can reach large numbers of people via the workplace, they already offer rewards and benefits that can be used to improve financial wellbeing and both employee and business performance will benefit from improved financial health.
“Understanding employees financial health as a whole, and knowing those that need most help, has to be the starting point to ensure that an inclusive, effective, and targeted financial wellbeing programme is implemented. A single channel, ‘one size fits all’ financial wellbeing approach is likely to fail many.”