Nearly a quarter of those in their 50’s are concerned that they will be forced to lose their homes due to not be able to keep up either mortgage or rental payments, according to Age UK’s Economic tracker.
This is despite traditionally, people in their 50’s being at the peak of their earning potential and having had the longest time to accumulate wealth. The survey thus demonstrates a significant concern for a large proportion of individuals in this sector.
Age UK believes the results paint a worrying picture of a generation of ‘tomorrow’s pensioners’ beset with financial worries, including potentially finding themselves homeless at a particularly vulnerable age.
Michelle Mitchell, Age UK Charity Director General, said:
‘We know that times are tough financially, but when a significant number of people aged 50 and over say they are worried about losing their homes, it’s a clear sign that many are truly struggling to keep their heads above water.
‘While all sorts of factors may be at play, we know that too many older people currently find themselves locked out of the job market just because of their age.
‘With the State Pension Age rising to 67 by 2028, it’s more important than ever that the Government, employers and recruiters ensure that people looking for work are judged on their skills, expertise and what they can bring to a job, not just their birthdate, enabling them to continue to contribute to the economy and build up to a financially secure retirement.’
Financial changes have also beset the aged, worsening the situation. Those who have already retired have been hit by falling savings rates and anyone with a private pension will have found annuity rates at a historic low.
Since April 2012, the annual income, or annuity, from a £100,000 pension pot has fallen by £433, according to Age UK.
With the Bank of England base rate at a historic low, this poor return was inevitable. Pension funds, being low risk investment conduits, typically invest in low-risk government stocks which are tied closely to the Bank of England base rate – currently set at just 0.5%. On that logic, once the base rate is increased – which it must be in the future to control inflation (what once was its primary only function) – annuities should correspondingly increase. Savings rates, likewise, should creep up.
Thus, although the picture is doom and gloom for many now, the coming years should see an improvement. Even for the here-and-now though, it wasn’t all bad news. The same Age UK survey revealed on a more positive note that 38% of the sample stated that the future looks rosy and good for them.