Retirement news
Pensioners money meltdown revealed
15 October, 2007
The majority of over 60s are getting by on less than £10,000 a year. Even more worrying is the raft of cost cutting measures they are taking to reduce their outgoings in retirement, which includes scrimping on food, clothes and heating bills.
The true extent of the pensions crisis was revealed by Norwich Union's latest research where 11 per cent of over 60s admitted they have stopped taking holidays, the same number have reduced their spending on clothes, toiletries and footwear and a further 11 per cent have cut down on socialising.
In addition, 9 per cent have cut back on the amount of time they keep their heating on, 6 per cent have reduced their spending on food and a further 5 per cent have stopped using a car.
The study was compiled as part of ongoing research to support Norwich Union’s equity release offering. The company recently revealed that Britain’s over 60s are sitting on a property equity goldmine of £841 billion, equivalent to £82,446 per person.
Despite having to make these cutbacks, only 29 per cent of the over 60s questioned are claiming benefits to help them through retirement, with 70 per cent believing that they are not eligible.
Money worries weigh heavily on the minds of Briton’s over 60’s, with the increasing costs of household bills of major concern to almost one in five. The future is also a worry, 16 per cent fret about how they would afford long-term care should the need arise. 11 per cent are anxious that they may not have enough money to live comfortably in their retirement and a further 11 per cent are concerned they will not be able to cope with the rising cost of living.
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Being unable to leave an inheritance is a worry for 6 per cent, while 5 per cent are apprehensive about having to rely on their family for support.
Dominic Fraser-Smith, Group Product Manager at Norwich Union Post Retirement Products, said: “This research paints a concerning picture of the struggles faced by the UK’s over 60 population. Their golden years should be spent enjoying the fruits of their labour rather than worrying about their finances. There should be no need for pensioners to be taking measures such as reducing the amount of heating they use in their homes when they are sitting on a potential goldmine of £841 billion – the amount of housing equity owned by the UK’s over 60 population.
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“While equity release is not necessarily the right course of action for everyone, it does have place in the world of retirement funding and it is an option those approaching retirement should consider as part of their retirement planning.”
An equity release policy will affect the amount of capital planholders are able to leave to their dependents and could affect any state benefits they receive. There are costs involved when taking out an equity release plan.
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