Your Money - Your Future
The Impact Of Disability On Financial Planning
Back to News & ViewsReport highlights retirement savings must be inclusive for everyone
Disability significantly affects the financial planning of nearly a third of disabled individuals. This was the key finding of a report that highlighted the additional financial burdens people with disabilities in society suffer[1].
This emphasises the need to understand better and cater to the diverse needs of disabled and vulnerable individuals to make retirement savings inclusive for everyone. Worryingly, some 31% of disabled respondents admitted to their disability shaping their financial management strategies.
Not saving sufficiently for a comfortable retirement
What’s even more alarming is that these findings align with another report, which revealed that 51% of disabled individuals are not saving sufficiently for a comfortable retirement, in contrast to the 45% of non-disabled individuals who feel unprepared for their post-work years[2].
This falls short of the minimum advised by the Pensions & Lifetime Savings Association (PLSA). The research further unveiled that the average annual income for a disabled person is projected to be a meagre £11,000. This is less than two-thirds of the £19,000 average predicted for individuals without disabilities.
Discriminatory workplace practices
The report also delves into the changes necessary to enhance the retirement prospects for disabled individuals. It sheds light on the struggles some disabled people face in making financial plans. These challenges often stem from discriminatory workplace practices and extra costs that hinder their ability to save for the future.
According to the report, there’s a significant disparity in employment rates among individuals with disabilities and those without. Only 37% of individuals with a disability that severely hinders their activities are employed, while this number rises to 65% for those with a less limiting disability. However, both these percentages fall short of the 82% employment rate for individuals without any disability.
Pronounced challenges for the disabled
The variations in employment rates can substantially impact the lifestyle quality of disabled individuals. Retirement is a daunting prospect for many, but it poses more pronounced challenges for the disabled.
While pensions remain the cornerstone of most people’s retirement plans, with millions investing in an employer-provided pension scheme, many disabled people will find it difficult to achieve a satisfactory retirement lifestyle.
Source data:
[1] Survey administered online by Quadrangle on 1614 members of the Scottish Widows Master Trust between 18/04/2023 – 16/05/2023.
[2] https://www.plsa.co.uk/Policy-and-Research/Topics/Retirement-Living-Standards
THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.
A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE).
THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.
YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.