(REUTERS) – The Covid-19 pandemic is making Britons rethink their retirement and long-term savings plans, an added boon for money managers who are already benefiting from a record-setting recovery in financial markets.
The death of a loved one, the need to squirrel away funds for emergencies and pandemic-influenced changes in life goals are motivating more people to have conversations about financial planning, British money managers said.
“We have seen three characteristics emerge from this crisis – the early retirees, the retirement delayers and the newly motivated pension planners,” said Ms Rosie Hooper, chartered financial planner at asset manager Quilter. “This pandemic has just accelerated things, whether out of necessity or desire.”
In the first few months of the pandemic last year, investors were hit hard by a collapse in financial markets. Massive government stimulus, however, has lifted sentiment since then.
While some have used the money for big-ticket purchases like cars and homes, others are salting it away.
A survey by the country’s statistics office shows that one in eight workers aged 50 and over, or 13 per cent, said they had changed their retirement plans, with 5 per cent saying they will retire earlier and 8 per cent planning to retire later.
The crisis has also upended priorities: Some want to spend more time on pet projects or with family, as many continue to work from home despite vaccination drives and as companies cut their real estate footprint.
Ms Sarah Coles, a personal finance analyst at Hargreaves, which manages 1.5 million clients, said: “For some people, it has opened their eyes to the compromises their working life has forced on them, so they’re keen to leave it all behind as soon as possible.”
Mr Tom Selby, senior analyst at AJ Bell, which has 346,700 customers, said new customers at its investment platform surged by nearly two-thirds in the first three months of this year from a year earlier.
A majority of them invested for the long term via savings accounts and pensions.
Mr Andrew Croft, chief executive officer of blue-chip asset manager St James’s Place, said: “Everyone will know someone who very sadly has passed away as a result of Covid-19… That will make people consider their life plan, their life goals, when do they want to retire.
“People will be considering that a lot more. If you reach a conclusion that maybe I want to retire earlier than I originally planned, what you are going to do is you are going to find your way to a financial planner.”
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