Boomers forced to postpone retirement
Forty percent of American Boomers (aged 45-64) expect to postpone their retirement due to the economic recession, according to an online research study of 4239 consumers in the UK, U.S., France, and Germany aged 16-64 during December 2008 by global market insight and information group, TNS. The TNS Financial Crisis study looks at how the global financial crisis is affecting customers in four key countries: the UK, France, Germany and the U.S.
Thirty-two percent of all Boomers in the 4 country study expected to forestall retirement. This rises to as high as 40 percent in the U.S., 28 percent in France, and 23 percent in the UK. However, people in the same age group in Germany see less need to postpone retirement, with only 13 percent agreeing that they would have to retire later.
Younger Boomers' (aged 45-54) plans for retirement are most impacted by the crisis with 45 percent of U.S. respondents planning to delay retirement, 35 percent in France, 22 percent in the UK and 13 percent in Germany. Older Boomers (55-64) who have fewer options for retirement scheduling are less likely to postpone than the younger segment at 30 percent in the U.S., 24 percent in the UK, 19 percent in France and 13 percent in Germany.
"This research shows the immediate impact of the economic recession on retirement plans and employment patterns," says Bob Neuhaus, EVP Finance, TNS North America. "The different consumer segments are experiencing different levels of shock, so provider's approach to retirement products needs to be recalibrated to fit their different experiences."
TNS's recent Financial Crisis Study revealed postponing retirement to be one of several likely measures arising from the global financial crisis – alongside respondents increasing their working hours, cited by a massive 57 percent of people in the U.S., 44 percent of people in the UK, 42 percent in France, and 29 percent in Germany. Additionally 24 percent of Americans say they need to borrow more money, as compared to 18 percent in France, 16 percent in the UK, and only 8 percent in Germany.
Delayed retirement plans mean more people competing for work in a contracting job market. Many people expect major losses to come their way; approximately a quarter of those surveyed believe that their job is at risk, with those in the U.S. leading the way at 32 percent and the UK following closely at 29 percent. Only 19 percent in France and 18 percent in Germany fear to lose their jobs. Surprisingly, nearly 10 percent of people globally (13 percent in the UK, 11 percent in the U.S., 6 percent in France, 4 percent in Germany) expect to lose their home. This situation is exacerbated by increasing difficulties in securing credit which is a problem experienced by 72 percent of people in France compared to 54 percent in the U.S.
Respondents across the four countries expect this global crisis to play out for at least another one to two years or longer. Eight-one percent of people in the UK, 66 percent in the U.S., 74 percent in France, and 66 percent in Germany now accept that the current situation will lead to a depression in their country – which many economists agree is already the case. Approximately one-third of respondents expect their household income to decrease in the next six months, which reflects the views of 32 percent of UK, 39 percent of France and Germany, and 28 percent of people in the U.S. This number rises to 48 percent in the UK, 42 percent in the U.S. and France, and 30 percent in Germany for those aged 55-64.
"As the global financial crisis impacts so much of our daily lives, it is hard to see any positives," said Neuhaus. "However, people are accepting that the intensity of the crisis will drive regulatory change. The vast majority of people believe that the current economic problems will prompt a positive move towards stricter government regulation of financial institutions and prompt changes that will bring about more sensible personal banking."