Retirements in peril as Covid hits finances of one in three older workers

The pandemic is wrecking millions of older workers’ retirement dreams as crashing stock markets and a wage slump make it impossible for them to give up work, the Institute for Fiscal Studies (IFS) has warned.

Huge numbers of pensioners could find themselves significantly worse off than planned in retirement, the IFS said, following a plunge in share prices which has wiped 22pc off the FTSE 100 since the start of the year.

A third of older people say they are worse off as a result – while 8pc have said they will be forced to push their retirement date back.

There were 10.7m over-50s in work before the pandemic struck, according to the Office for National Statistics, suggesting as many as 850,000 could delay retirement if the survey reflects this age group.

Meanwhile, 5pc are planning to retire sooner than expected. Although this group encompasses some richer households, it also includes may workers who have given up hope of returning to their job after being put on the taxpayer-funded furlough scheme, which is ending next month.

Almost a quarter of older workers have been furloughed, and 15pc of workers in the age group think their job is unlikely to return after the pandemic.

Rowena Crawford, of the IFS, said: “The current pandemic risks having serious and long-term financial consequences for older workers, affecting living standards into and through retirement.

“Those on furlough are now more likely than those working to be planning to retire earlier and it will be important to monitor that this does not represent a rise in involuntary retirement among people discouraged from finding new work.

“On a positive note, those working from home are now more likely to be planning to retire later; suggesting changes to work practices could benefit some older workers.”

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