While the UK and much of Europe has re-entered lockdown, the prospect of a coronavirus vaccine and a new President in the White House have boosted investor confidence as well as the value of pension pots linked to the stock market.

This year’s events have had a deep impact on household finances in the UK, but have they made permanent changes to retirement plans? The official data paints a mixed picture, and advisers say that while there has been little evidence of panic among potential retirees, there has been a big shift in attitudes. In April, in the aftermath of the sell-off in global stock markets, we asked whether you should take a pension holiday to shore up your finances.

Those who kept investing in equities via their pensions will have been rewarded as stock markets have recovered strongly since then. So someone looking at their pension statement in November may be feeling more optimistic about their retirement prospects than they did in March and April. But we are still a long way from normality. Here, we look below at how coronavirus has shifted the dynamics of retirement. Changed Spending Patterns In July, we tackled the difficult question of how much money you need to retire.

This year’s events have forced people to reassess what their spending priorities are – if you can’t take three holidays a year and don’t need really that second car, perhaps you may need less in retirement than you think. Further reductions in spending come from having no commuting costs to pay and not having to pay National Insurance on your income. Whether a vaccine will trigger a holiday and eating out boom remains to be seen but for some, this year has proved they can live comfortably without this discretionary spending.

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