- However, concerns remain about funding retirement
Despite Covid-19’s impact on personal finances, over three quarters (77%) of UK homeowners over the age of 40 are confident about their current financial situation, research from Canada Life today reveals.1 However, when looking further ahead, they are less positive about their retirement prospects. 16% don’t feel they will have enough pension savings to fund their plans, such as paying for their current lifestyle through retirement.
Driving the confidence in the financial situation of this group is an increase in savings. Over the last 12 months, over two fifths (42%) of UK homeowners over 40 have saved more during the pandemic. They have saved an average £2,570 more this year. Those in the South East have saved the most, at an average of £3,150 while those in the East of England have saved the least, at £1,915. In contrast, around a sixth (16%) of respondents say they have saved less, with an average reduction of £1,550 this past year.
While there is confidence around their current financial situation, this is not replicated when it comes to saving for retirement. 21% don’t feel they will have enough to fund their aspirations such as home improvements, a holiday or car and a third (31%) don’t feel they will have enough pension savings to fund their dreams such as regular holidays or a second property.
Alice Watson, Head of Marketing, Insurance, Canada Life said: “Covid-19 has divided the nation when it comes to personal finances. Our research shows that many have been fortunate enough to have saved more this year, thanks to lower travel costs and fewer holidays. However, others have been facing financial difficulties, as many people navigate furlough or unemployment.
“It’s encouraging to see so many people remain confident about their current financial situation. However, there is clearly a shift in confidence when it comes to retirement planning. This is where property wealth will play an increasingly important role, as people may be unable to rely solely on their pension income.
“While saving for retirement may seem like a daunting task, considering how different types of wealth can be used during retirement is crucial. Speaking with a financial adviser is a sensible first step, as they can demonstrate how property wealth could be used to meet the needs of homeowners nearing retirement, helping them to reach their retirement goals.”
- Source: Research among 1,020 UK homeowners aged 40+ conducted by Opinium Research between 26-31 March 2021.