Retirement Plans Torpedoed By Brexit Vote

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Turmoil and uncertainty in the financial markets has led to close to a third of over 55s altering their retirement plans, according to new research.

Thousands are rethinking their finances due to the Brexit vote, while around 55,000 may have to put giving up work on the back burner.

The research was undertaken within a week of the historic referendum vote on June 23 by financial firm Prudential.

Although the results represent what over 55s were thinking about their retirement prospects straight after the referendum, a similar poll taken now could return completely different results.

The study found 20% of those aged between 55 and 64 approaching retirement were concerned that they might have to change the plans for retirement, while 51% thought they may have to delay their retirement date.

Delays and uncertainty

“Many who were wondering whether to retire may not now in favour of working a while longer,” said Vince Smith-Hughes, the firm’s retirement expert.

“Low interest rates will have affected people’s savings, while concerns around the property market may also have had an impact on their plans.

“Perhaps people are relying on their own property or buy-to-let or property funds and they’re thinking that is one of the things that means they are going to have to delay their retirement.”

Besides Brexit, falling annuity rates and stock market volatility give concerns that expected income during retirement may fall short.

Annuity rates are affected by gilt yields, which are offering only a 1.5% return, while keeping pension cash invested to generate an income depends on how the stock market performs.

Confidence dented

The Brexit result is also making consumers wait and see before making planned big ticket purchases, such as moving home, switching cars or going on holiday.

A poll by Ipsos Mori reports many consumers had delayed spending decisions by up to six months following the referendum because they feared their finances would worsen and they might need the cash to pay household bills.

The survey also found 57% of consumers did not think Brexit would make them any worse off in six months and 18% believed the decision would improve their finances.

“Consumer confidence in the economy is the lowest for four years. The impact of the Brexit result is undeniable,” said a spokesman.

Retirement Plans Torpedoed By Brexit Vote
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