While Covid alters many retirees’ plans, two thirds face running out of money

28th April 2021 by RetireEasy

Two thirds (66%) of 2021 retirees risk not having the pension savings to sustain their planned retirement income, according to a new report from Standard Life Aberdeen. The report also says that almost two in five (37%) 2021 retirees have accelerated their retirement plans due to Covid-19.

After surveying UK adults planning to retire this year, the research found that a 2021 retiree plans to spend, on average, £21,000 a year in retirement – almost £10,000 less than the average UK household income (£29,900)*.

However, looking at their pension pots, and factoring in the money they’ll receive from their State Pension, analysis shows that two thirds (66%) are at risk of running out of money.

The average value of a 2021 retiree’s pension pot is £366,000 – but a third (33%) admitted to having less than £100,000 saved.

John Tait, Retirement Advice Specialist at Standard Life Aberdeen, said: “Retirement is a marathon, not a sprint, and many could be going into it without sufficient preparation or planning.

“Pension pots are without a doubt the most popular option for funding retirement, but it’s so important that retirees consider any other savings or assets they can use when deciding whether they can afford to retire or not.”

The research also found that more than a third (37%) of those planning to retire this year are worried about not having enough money to last throughout retirement.

Just two in five (39%) feel very confident that they’re financially ready to finish working this year, with a third (34%) of women feeling very confident versus two in five (43%) men.

Almost half (48%) are planning to reduce their usual spending to support themselves in retirement, while a quarter (27%) will work part-time to help financially. One in five (21%) are planning to sell their home or downsize to fund retirement.

Changing retirement plans

Lockdown changing their retirement plans, health worries due to the pandemic and job uncertainty were the three main reasons for speeding up their retirement.

However, there are clearly some apprehensions about retiring during a pandemic amongst this year’s retirees. More than half (51%) are worried about not being able to do things they planned, while two in five (43%) are concerned they won’t be able to see friends and family.

When it comes to their finances, three in ten (29%) have concerns about their pension falling in volatile markets, and almost one in five (17%) have seen their income fall over the past year.


How are YOUR retirement plans faring?

Whether you have had a good year financially, or have struggled to keep your pension savings going, now could be an excellent time to check that your retirement plans are on track – and that your money is in the best possible place.

Check out how you are placed by logging onto your RetireEasy LifePlan, which will give you an instant update.

If your subscription has lapsed, LifePlan Classic costs just £5.99 a month to get regular updates on your progress!


New features on RetireEasy.

Not yet retired?

You can now include all your additional savings, investments and Pension Contributions between now and your retirement, taking into account increasing these Additional Contributions year-on-year and stipulating whether these are one-off or recurring contributions. As always, you can revisit these projections and change them at any time either when your expectations change, or you have real numbers to replace projections already made.

New useful charts?

There are now three additional charts, further breaking down your assets and income.

Download your data in a spreadsheet?

You can now also download spreadsheets giving you the opportunity to view all of your entered information, and your entire LifePlan in one glance.

Sign up now