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37% of savers have taken action relating to their pension in lockdown

  • 37% of pension savers – equivalent to 7 million people – have taken action relating to their pension during the lockdown, and nearly a third (29%) are using the lockdown to review their spending habits more often
  • Almost half (46%) of 45-54-years-old currently lack confidence in their financial situation, compared with 38% across all adults
  • 1 in 10 (10%) mid-life workers (45-54-year-olds) believe they will need to delay retirement plans due to the current impact of COVID-19

More than a third (37%) of pension savers – equivalent to 7 million people – have taken action relating to their pension during the lockdown so far1, according to latest analysis from Aviva.

The research into how savings and retirement plans have been impacted by the COVID-19 pandemic and the subsequent UK lockdown reveals that more people have used their additional spare time to think about their finances. Almost a third (29%) of UK adults stated that they are now reviewing their spending habits more often, while one in seven UK adults (16%) agreed that the lockdown has prompted them to think about their pension more.

However just 1 in 10 (11%) pension savers have decreased or stopped contributions, while 8% have checked where their pension is invested (including 17% of 25-34s), and 5% have increased their contributions (including 10% aged 25-34).

Pension savers* were asked: "During lockdown, what actions, if anything, have you taken in relation to your pension savings?" (*Respondents with pension savings only). 

I have not taken any actions in relation to my pension savings during lockdown

63%

I have checked the value of my pension

15%

I have checked where my pension is invested

8%

I have decreased my pension contributions, but I am still saving

6%

I have withdrawn money from my pension

5%

I have stopped my pension contributions altogether

5%

I have changed where my pension is invested

5%

I have increased my pension contributions

5%

Other, please specify

2%

Men were more likely than women to have checked their pension value and investments (27% men vs 18% women) but worryingly, they were also more likely to have decreased or stopped pension contributions altogether (13% men vs 8% women).

Alistair McQueen, Head of Savings and Retirement at Aviva comments: “Some have taken time during the lockdown to pay closer attention to their pension performance and savings habits which is very promising to see. It is vital that this behaviour becomes the ‘new normal’ post-lockdown, as savers face the challenge of funding their needs in later life.

“But while it’s good practice to pay close attention to their finances, this shouldn’t necessarily mean they need to take action. While it may be concerning to see COVID-19 rattle the market, long-term investors – like pension savers - should be careful not to over-react. Volatility in the stock market is normal and markets often rebound quickly, and decisions made in haste and under stress are rarely good ones.

“People need to base their considerations on their own situation and not on the headlines. They may be able to look at their pension or ISA online and view their investments that way, and with this information they may want to consider rebalancing their investments, to ensure their risk is spread.

“But if people are unsure about what to do, their best investment could be to seek some professional financial advice. An adviser’s expertise should help to navigate situations like the one we’re in and, while there may be a charge involved, the peace of mind this brings carries value in itself.”

Attitudes towards retirement

Impact on individual finances is also forcing many to reconsider retirement plans. One-in-ten (10%) mid-life workers aged 45-55 have said that the financial impact of COVID-19 has caused them to delay their retirement plans.

This comes as almost half (46%) of those aged between 45-54-years-old are currently lacking confidence in their financial situation, compared with 38% across all adults.

As a result 1 in 10 (10%) in this age group believe they will need to delay retirement plans, although 6% stated that the current impact of COVID-19 will make them think about retiring earlier than planned.

Alistair McQueen, continues: “The ongoing COVID-19 pandemic has caused financial difficulties for many, and for thousands of middle-aged people retirement plans are likely to be put on hold. Employees today are already working longer than generations before them, but as savings plans are likely to take a hit due to sweeping changes to circumstances, many are now facing the possibility of having to work for longer to enable their finances to catch up.

“Faced with a quickly evolving economic environment, it’s vital that people familiarise themselves as much as possible with their own situation. A good way to figure out how plans may be impacted is by adding up current monthly savings, looking at where there may be a shortfall, and considering how to make this back up. It’s also advisable to keep on top of pension statements to see what various pots are worth now, and what they might add up to in the future, and create a budget based on current expenditure so they have a good idea of future outgoings.”

Three free services to help you take control of your long-term finances are listed below:

  • For your monthly budget: the government’s Money Advice Service provides a free online budget planner
  • For your pension planning: Aviva provides a free online retirement planner
  • For your retirement options: the government’s Pension Wise service provides free guidance to how you can use your pension savings from age 55

- ENDS -

Sources:

1 Research among 2,020 UK adults conducted on behalf of Aviva by Censuswide, 07–11/05/2020. All figures featured in this release refers to this dataset unless otherwise specified.  

The 7 million figure has been calculated using the latest DWP Workplace Pension Participation statistics which shows that there are 19.2 million pension savers in the UK.

Employees aged 45+ are defined as ‘mid-life employees’ throughout the release

Fiona Whytock

Retirement, Savings and Investments

Notes to editors:

  • For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/
  • Aviva is a leading international savings, retirement and insurance business. We exist to be with people when it really matters, throughout their lives – to help them make the most of life. We have been taking care of people for more than 320 years, in line with our purpose of being ‘with you today, for a better tomorrow’.
  • Our vision is to earn our customers’ trust as the best place to save for the future, navigate retirement and insure what matters most to them. In 2019, we paid £33.2 billion in claims and benefits on behalf of our 33.4 million customers.
  • We operate through five business divisions: Investments, Savings & Retirement; UK Life; General Insurance; Europe Life; and Asia Life; and focus on three strategic priorities: deliver great customer outcomes, excel at the fundamentals and invest in sustainable growth.
  • Total group assets under management at Aviva group are £510 billion and our Solvency II capital surplus is £12.6 billion (FY19). Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
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