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The true impact of the cost-of-living crisis on pension plans revealed

Skyrocketing inflation over the past 12 months has led to a cost-of-living crisis that is upending the financial plans of millions across the UK.

According to the Office for National Statistics, the consumer price index (CPI) rose by 10.1% in the 12 months to July 2022, up from 9.4% in June. This was not wholly surprising considering experts are predicting CPI will hit 13% or higher when the energy cap rises again in October. Moreover, UK inflation could hit 18% in early 2023, says leading bank Citi.

At the end of last year, the Bank of England (BoE) predicted that inflation would peak at 5% in 2022 before cooling off. Fast forward to August 2022, and the BoE has made six consecutive votes to increase the base rate, the latest by 0.5%, resulting in a rise to 1.75%.

Certainly, inflation has not slowed down as early predictions had counted. Instead, people across the UK face a significant struggle as a result of the cost-of-living crisis, which is only expected to worsen before things start to improve.

So, what impact is this having on pension planners and retirees?

My Pension Expert commissioned new, independent research to find out. Working with Opinium, we conducted a nationally representative survey of 1,254 UK adults – this included 788 respondents who, at the time of the survey, were aged 40 and above and in full-time or part-time work, and a further 466 who were retired.

We have created a new, in-depth report that is filled with significant insights into the effects of the cost-of-living crisis on retirement strategies for both retirees and those still in employment.

Among other key findings, the research found that a sizeable number of adults in the UK have come out of retirement to resume work as a result of the cost-of-living crisis. Meanwhile over a third of over-55s stated that retirement seems unrealistic for the foreseeable future further highlighting the effect the economic situation is having on people’s finances.

Click here to download your free copy of our new report.

For anyone who is worried about their retirement strategy and how they might need to adapt their pension plans in light of the cost-of-living crisis, it is imperative they seek independent financial advice. An adviser can assess the entirety of your financial situation and tailor specific advice to help you achieve your retirement goals.

Get in touch with the friendly, experienced My Pension Expert team today.