One in four UK workers change pension plans due to pandemic

According to a new survey by money.co.uk, workers either look to increase payments or reduce their contribution due to economic hardships caused by the Covid-19 crisis

One in four workers in the UK have changed their pension plans due to the Coronavirus pandemic, according to new research released on Pensions Awareness Day.

One in four workers have changed their pension plans due to the pandemic, as they either look to increase payments to try and save for the future or reduce their monthly inputs due to economic hardships, according to a new survey by money.co.uk.

Another survey from Close Brothers revealed that funding retirement is the biggest money worry for UK employees and that 13% of employee planned to save more into their personal pension in light of the pandemic. An additional 11% planned to increase their contribution to their workplace pension.

More workers aged 65 plus appear to be retiring due to the Coronavirus pandemic with a slump in employment particularly marked among women according to the latest ONS Labour Market figures.

Employment among women aged 65+ peaked in the first three months of this year at 631,000 but in the May-July period has dropped to 540,000, a fall of 91,000. The employment rate has also slipped from a high of 9.7% to 8.3%.

That compares to men aged 65+ who saw the employment number, also at a record high of 790,000 in January-March fall by 51,000 to 739,000, with the rate dropping from 14.1% to 13.1%.

In addition, 80% of those surveyed said they were not banking on claiming a state pension and had taken out personal pensions to be able to afford to live once they eventually stopped working.

Four in ten (40%) of those surveyed said they do not understand the process it takes to obtain their pension.

Salman Haqqi, personal finance expert at money.co.uk, said: The thought of having to work everyday for the rest of your life is a pretty bleak one, but it is the reality facing many workers across the country as the financial aftermath of coronavirus undoubtedly impacts our future retirement plans.

Despite millions being eligible for a state pension, and despite paying for it through National insurance contributions, the majority of us are not relying on it, Haqqi said.

Stephen Lowe, group communications director at Just Group, said: Until recently, the number of working women aged 65+ has been catching up with the number of men, driven by the equalisation of State Pension Age for men and women.

He said, these latest ONS figures suggest that one effect of the pandemic has been to knock back progress, with the number of older women staying in the workforce falling sharply. That could be because women are three times more likely to be part-time workers than men and part-time workers have been hit harder than full-time employees.