Pensions: Bleak picture for over-55s
PUBLISHED: 07:22 09 March 2011
A report into the financial situation of the over-55s has painted a bleak picture, thanks to a combination of falling incomes, increasing mortgages and fewer savings.
The latest Real Retirement Report – a quarterly publication produced by Aviva – has found that average incomes for over-55s have fallen by 4pc over the past year; the typical mortgage debt has risen by more than £10,000; and the number of households with savings of less than £500 has jumped from about a fifth to nearly a third. Almost a quarter of people quizzed for the report said they didn’t expect to be debt-free until they were at least 75, and 15pc of them said they thought they would never be able to pay off all their borrowings. The increased cost of living was cited as the main reason behind people’s debts, with 29pc having borrowed to fund essential purchases and 18pc saying that unemployment or being unable to work as much as they wanted to was a contributing factor. “The picture [the report] reveals is concerning, as while incomes have fallen and savings pots grown smaller, mortgage debt has increased and inflation has hit key expenditure pressure points,” said Aviva director Clive Bolton.
“Pressure on retirement income is rising. While there isn’t one single cause for people’s money worries, the combination of economic and social factors over the last year has impacted on many individuals’ plans for their retirement years.
“We know from previous reports that many people are looking to work into retirement – and for people in debt this may be a good solution.
“However, looking forward, we would urge people to think about their retirement sooner as life expectancy figures indicate more of us will be living longer and we will need to increasingly provide for ourselves.”