53% of over-50s who are yet to retire are unable to estimate what proportion of their current income they will need to maintain when they stop working to have a comfortable retirement. This lack of understanding is coupled with a widespread lack of confidence about having sufficient income in retirement as 50% do not think they will have enough for a comfortable retirement.

COVID-19 has focussed minds on immediate concerns, and there is a risk that it could lead people to neglect longer-term planning. However, it has also made people more conscious of their vulnerability to ill health as they get older. 22% of over-50s have reassessed their later life plans as a result of the pandemic.

One difficulty in the market is convincing mainstream consumers to take up professional advice, despite concerns about future income and lack of knowledge about later life needs. Many consumers simply do not think financial advice is relevant to their situation.

Long-term care needs also remain under-appreciated by a significant proportion of over-50s. Just a third say that ensuring they have enough money set aside to pay for this is a priority for them. Long-term care will continue to become a growing issue in the coming years, and there is a significant opportunity for brands to improve customer engagement in this area.

Key issues covered in this Report

  • The impact of COVID-19 in later life financial planning.

  • Over-50s’ consideration of later life financial planning and the sources of information used.

  • Barriers to over-50s’ use of financial advice to make later life financial plans.

  • Over-50s’ priorities for later life financial planning and expectations of future income needs.

  • Preferences for who over-50s would trust to take care of their affairs in later life if they are unable to.

  • Consumer attitudes towards later life planning, including confidence in achieving a comfortable lifestyle.

COVID-19: market context

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. As the case level rose, the government ordered the closure of non-essential stores on 20 March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. It wasn't until 15 June that non-essential stores were allowed to re-open, followed by pubs, restaurants, hotels and hairdressers on 4 July, and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a full month-long lockdown from 5 November, and Scotland introducing a new five-level system of coronavirus restrictions.

The lockdown of England ended as planned on 2 December, but the revised Tiered lockdown meant that almost all of the UK faced heavy restrictions on social activities. Although all non-essential retailers were able to re-open, foodservice and hospitality businesses still face extremely challenging conditions. The successful vaccine trials, however, show that there is a path out of the crisis, and the first UK vaccination was administered on 8 December.

Economic and other assumptions

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its November 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP will have fallen by 11.3% in 2020, recovering by 5.5% in 2021, and 6.6% in 2022. GDP isn’t expected to return to pre-COVID levels until the fourth quarter of 2022. The central scenario has unemployment peaking at 7.5% in Q2 2021.

The current uncertainty means that there is wide variation on the range of forecasts, however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q4 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

From the start of the outbreak, we have made the assumption that an effective vaccine would not be widely available until well into 2021. On 9 November, Pfizer and BioNTech announced highly encouraging results from trials of their vaccine, followed by similarly positive results from Moderna and the Astra Zenica/Oxford trials. The first patients were vaccinated on 8 December, but the full rollout will take many months, meaning that Mintel is still making the assumption that we will be living with COVID for some time to come.

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