30% of 55 to 64-year-olds may change retirement finances due to Brexit - survey
Nearly one in three people approaching retirement are considering changing their financial plans due to the uncertainty around Brexit, a survey has found.
Some 30% of 55 to 64-year-olds think they will have to make new arrangements following the vote to leave the EU - and 37% of these people may be forced to delay their retirement until the economic picture becomes clearer - Prudential found.
With around half a million people retiring across the UK each year, this could equate to 150,000 of these people changing their financial plans and 55,500 possibly pushing back their retirement.
Prudential's research, carried out during the week after the referendum vote, also found that across different age groups generally, one in five (20%) people think they will need to change their retirement planning and of these, more than half (51%) think they may retire later.
In a sign of consumers exercising greater caution, one in six (16%) people surveyed now plan to ramp up their savings, while 58% will continue to save the same amounts, despite low interest rates.
But 1% of people surveyed said they would give up on the idea of saving for a pension.
One in five (20%) also plan to seek financial advice as a result of the referendum vote.
The survey of over 700 people across the UK also found 36% are concerned about the property market in the wake of the referendum vote.
A recent report from Royal London said as many as three million working age Britons are relying on their home to fund their retirement - by downsizing to a smaller property.
Vince Smith-Hughes, Prudential's saving and retirement expert, said low interest rates will have affected people's savings, while concerns around the property market may also have had an impact on their plans.
He told the Press Association: "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."
Recent falls in annuity rates amid market volatility may also be partly behind some people's decisions to put off their retirement or change their plans. When many people retire, they use their pension pot to buy an annuity, which can give them a fixed income for the rest of their retirement.
But the pension freedoms introduced in 2015 mean that retirees are no longer required to buy an annuity with their pension pot and they have a wider range of options.
Mr Smith-Hughes said that some people who had been wondering whether or not to retire may have been nudged towards working for a while longer by the economic uncertainty.
He said: "For people who are thinking: Can I or can't I afford to retire? this might very well mean financially, I'll give it a bit longer before I actually make that decision and continue to work for a bit longer."
Asked about the three-quarters (74%) of people who plan to save the same amount of money or more as a result of Brexit, he said: "It feels like a very sensible thing to be saving more or at least continuing to save what you were saving."
For those who are wondering whether pension saving is still worthwhile in the tough economic climate, Mr Smith-Hughes said savers should make the most of the tax relief available on their pension pots as well as the employer contributions into a workplace pension.
He said people may want to consider spreading their investments around in different types of assets in the uncertain climate - and if they are not sure about their plans they could consider seeking financial advice.
The uncertain economic environment could also bring good opportunities for investors with an eye to the long-term returns.
Leila Butt, senior economist with Prudential Portfolio Management Group said: "We expect that there will be a lot of volatility out there stemming from uncertainty, not just related to the referendum but other factors. There is a positive in that you can, as an investor, take advantage of periods of volatility because they may offer pockets of value for an investor."
But she said investors should also bear in mind that in the short-term, the value of the assets they invest in may go down.
She said: "The important thing is diversification across asset classes, across geographies, and the patience to look through these periods of volatility in search of the longer-term returns."