September 16, 2020
The COVID-19 pandemic has raised serious concerns for everyone about retirement security, and even more so for those who are due for retirement. The pandemic has seen many workers being laid off by their employers, causing a rise in global unemployment rates (8.3% from 6.7% in 2019). Coile & Levine furthermore claim that these increased levels of unemployment also threaten economic well-being of those nearing retirement. Some employers, due to stress on their financial statements, have resorted to reducing employees’ salaries instead of laying off employees, which in turn impacts people’s standards of living and choice of investment vehicles.
Covid-19 has, to a large extent, affected those employees, who are about to retire vis-à-vis retirement savings. Retirement benefit schemes of employees, who contribute voluntarily have been affected the most. Events that affect the source of joy to investors (return on investments) have had and will have long lasting effects on future benefits. During the pandemic, we’ve witnessed panic buying of food and other items. Due to that action, prices of various goods and services scaled up dramatically. On the other hand, due to lockdowns in various areas, fewer quantities of products were exported by local markets, thus increasing domestic supply and circulation of goods, leading to a reduction in prices. Supply outweighed effective demand in many sectoral markets. A case in point is the price of matooke in Uganda, which declined from an average of UGX 25,000 to an average of UGX. 5,000 per bunch.