New research reveals that current working generations are reassessing their retirement plans as a result of the Covid-19 pandemic. Strikingly, most millennials said they are now planning to delay giving up work.
So what else does the data show? And should we all rethink our retirement plans? Let’s take a look.
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How have retirement attitudes changed as a result of Covid-19?
PensionBee’s Next Generation of Retirees Report reveals that 52% of millennials (24-40-year-olds) are planning to delay their retirement following the impact of Covid-19 on their personal finance goals.
Worryingly, an even greater number of those in Generation Z (18-23-year-olds) say they are now set to delay retirement. In this age group, 67% believe they will have to work for longer than originally planned.
For Generation X (41-54-year-olds), just 35% claim Covid-19 has negatively impacted their retirement planning.
According to PensionBee, many of those surveyed are ‘reassessing crucial aspects of their lives, including their retirement’ as a result of the unprecedented pandemic.
To compile its report, PensionBee surveyed 2,000 people from across the UK to discover how attitudes towards saving for retirement have changed since March 2020.
What else did the data show?
As well as the percentage of people who plan to delay their retirement, the report also shows us that Generation Z believes the pandemic will add two years onto their working lives, while millennials believe they’ll be in the workplace for 1.7 years longer than expected. The generation closest to retirement, Generation X, believe they’ll have to work for 1.4 extra years.
Interestingly, the report also shows that millennials managed to save more than the other groups. The average millennial saved £336 each month during the pandemic, while those in Generation Z saved £316. Those in Generation X managed to save the least, averaging £218 per month.
According to PensionBee, these savings stats may be down to the fact that Generation Z and some millennials are more likely to have lived at home during the pandemic, giving them more opportunities to save.
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How much is the size of an average pension pot?
PensionBee’s data also revealed the average pension pots across the three generations. According to the report, Generation X have the biggest pots (£33,547), followed by millennials (£22,049) and Generation Z (£21,765).
Despite those in Generation Z being younger than millennials, PensionBee says their similar-sized retirement pots may be down to the success of the auto-enrolment scheme which was launched in 2012. Auto-enrolment means everyone is now automatically opted in to a company pension unless they choose to opt out. Many of those in the youngest generation are likely to have benefited from this.
On a more negative note, the report also revealed that many respondents are anxious about retirement. That’s because 16% of Generation X, 12% of millennials, and 5% of Generation Z say they won’t be comfortable in retirement.
For the purposes of the survey, PensionBee says respondents were told a comfortable retirement may include ‘large expenses such as monthly car payments and annual holidays abroad’ in addition to ‘smaller expenses such as day trips, meals at restaurants and television subscription services.’
What did respondents say was the perfect age to retire?
Despite being the closest generation to retirement, Generation X believed 61 years old was the perfect age to retire. In contrast, 58 was the preferred retirement age for millennials and 57 was ideal for Generation Z.
Is it time to rethink your retirement?
Whatever you think of the survey results, it’s important to realise that the standard of your retirement may depend on the steps you take today.
To help reach your retirement goals, take the time to read our guides on the State Pension, investing and lifetime ISAs. For more tips, take a look at the latest Motley Fool retirement articles.
