Brits fear economic crash will impact retirement plans

Nearly 50% increase in those concerned about their later life planning

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Around a third of people living in the UK are afraid that an economic crash is going to hit their retirement goals, a survey by Sanlam found. 

The number expressing such a fear jumped to 29%, up from 20% in 2019 – representing a rise of 45%, year-on-year.  

Illness used to be the biggest barrier to achieving retirement plans – with 21% citing it as the greatest risk last year. It has now been overtaken by a financial crash, the advice firm said. 

In the latest survey, only 14% claimed illness as one of the biggest barriers to their retirement. 

Additionally, a quarter of Brits said they are currently struggling to save enough money every month to reach their goals once they stop working. 

Lack of confidence 

According to Sanlam, the change in retiree sentiment can be attributed to the outbreak of coronavirus and the subsequent falls in the stock market. 

Men seem to be more fearful than women, as 33% named an economic crash as the biggest concern, while 24% of women stated the same. 

Nearly one in five Brits is not confident they will achieve the goals they set out for their retirement, and the number of those feeling positive about their plans has dropped to 48% from the 56% in 2019. 

Seek advice 

John White, chief executive of Sanlam‘s wealth division, said: “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,” he added. 

Sanlam’s survey was conducted between 22 and 24 April 2020 and gathered responses from 2,007 adults aged 18+ in the UK.  

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