Just over one in five (21 per cent) have delayed their retirement date due to rising inflation.
Of those in retirement, 12 per cent say rising inflation has “upended” their retirement plans.
More than a third (34 per cent) of UK retirees are worried they will no longer be able to sustain their desired lifestyle in retirement as the cost of living increases so sharply.
Again, action is needed. People in their 40s, 50s, 60s and 70s are seeing their financial plans – which they have worked and contributed towards for decades – fall apart at the seams as bills and shopping receipts rise at a remarkable rate.
What action to take
Further government intervention seems inevitable. The price cap was the first such example of this, but we might also see other reforms to affect pension planners.
We know that the prime minister has already committed to continuing with the state pension triple lock.
But questions are arising as to whether Truss, Kwarteng and Smith will consider the money purchase annual allowance of £4,000; legislate a 10-day pension switch guarantee; and will they consider options to boost consumers’ saving potential, such as cutting VAT.
Moreover, it will be important to monitor how the long-awaited pension dashboards initiative progresses. Designed to allows savers to quickly review all their pension pots online through a single platform, the scheme has been delayed time and time again.
In July, the government pushed back its timetable for connecting the first two cohorts of pension schemes to the dashboards. Many people are expected to now have to wait until 2024 – five years behind schedule – to benefit from this advancement.
The new-look government needs to double down on the pension dashboards programme. Giving people easier, quicker access to their pension information is crucial in setting them on the path to seeking expert advice and consequently making prompt and informed decisions.
Smith and the DWP should do all they can to fast-track its implementation.
Bridging the advice gap
For me, any fiscal policy or new spending commitment must be combined with a keen focus on advice. At turbulent times like these, it is imperative that pension planners engage with independent financial advisers to create robust, informed financial strategies.
At present, this is not happening. My Pension Expert’s aforementioned study revealed that despite concerns over their finances and potentially having to ‘un-retire’, just 5 per cent of retirees in the UK have sought financial advice in 2022.
Among over-40s still in work, only 13 per cent have spoken with an IFA this year.
