Traditionally debt has been seen as mainly a concern for younger people with older people more likely to believe you should ‘cut your coat according to your cloth’ and save up for items rather than use credit. However there have been media reports suggesting this may be changing with headlines such as ‘Debt crisis for the over 60s’, and some information and advice services are reporting more older people seeking help with debts.
At Age UK we wanted to find out more about the extent and level of debt in later life and whether this has changed over time. So we commissioned the independent think tank International Longevity Centre – UK (ILC-UK) to carry out a detailed analysis looking at debt among people in later life. Continue reading
Posted in Income, Money Matters, Research
Tagged Age UK, Age UK blog, Ageing, ageing population, ageing society, credit, debt, debt advice, debt advisers, Debt and problem debt among older people', debt crisis, debt in later life, financial services, ILC-UK, Income Poverty, Incomes, Information and Advice, International Longevity Centre, International Longevity Centre – UK, let's talk money, money matters, older people, poverty, problem debt, Problem Debt Among Older People, research, Tales of the Tallyman: Debt and problem debt among older people'
Last week saw the publication of the long awaited White Paper on State Pension reform. This sets out plans for a single-tier State Pension of around £144 a week for people reaching State Pension age in the future (probably from April 2017 onwards). The reforms aim to create a simpler system, reducing the need for means-testing and making planning for retirement easier. They are also intended to produce a fairer system with a better State Pension for those who have had years of low earnings and caring responsibilities.
Age UK supports these aims and we have welcomed the reforms as an important step forward for future pensioners. However we are aware that there are criticisms. In particular many older people with State Pensions of less than £144 are angry that they will not benefit. Continue reading
Posted in Income, Money Matters
Tagged Age UK, Age UK blog, Ageing, ageing society, draft Pensions Bill, Income, Incomes, money matters, pension reform, pensions, Pensions Bill, retirement, Sally West, saving, Single-tier pension, single-tier State Pension, state pension, State pension reform, State Pension reform white paper, state pension system
Winter fuel payments are in the news yet again. I have lost count of the number of reports and media articles I have read about why these should be reformed and how the money could be better used to cut the deficit or transform our failing system of care or solve some other crisis. And please don’t tell me again that millionaires don’t need a winter fuel payment or a bus pass. Of course not – but let’s make policy changes based on the position of majority of older people not the small minority who are very rich. (when the Deputy Prime Minister pointed out last year that Alan Sugar didn’t need a bus pass Lord Sugar tweeted in no uncertain terms that he doesn’t have one!).
Photo: HarlanH (Creative Commons)
So should we be looking at restricting universal payments to the less well off? It has been suggested that they should just go to people receiving Pension Credit. However that would mean that up to 1.6 million of the poorest older people would miss out because they are not claiming the Pension Credit they are entitled to. The big advantage of universal payments is that they reach everyone including those do not take up means-tested benefits. They also provide some extra help to the ‘not rich but not poor’ group who can feel because they made sacrifices during their working lives they miss out on benefits and are penalised for having saved. Continue reading
Posted in Income, Money Matters
Tagged #spreadthewarmth, Age UK, Age UK blog, Ageing, ageing society, fuel poverty, money matters, older people, Pension Credit, pensions, spread the warmth, Spread the Warmth campaign, universal benefits, Winter Fuel Payments
At the start of this week I told colleagues at Age UK that year’s Budget was unlikely to have much specifically for older people – either good or bad. But I was wrong! Headlines the next day included phrases such as ‘pensioners robbed’ and ‘anger as pensioners suffer’.
Disingenuously changes to allowances for people aged 65 and over were not described as a tax increases but ‘simplification’. So what is the effect? Well freezing the age allowances and abolishing them for those reaching 65 from April 2013 will result in 4.4 million people losing an average of £83 in real terms in 2013-14, of whom 360,000 will lose £285.
These changes do not affect the poorest – over half of older people have incomes too low to pay income tax. But nor do they impact on the most wealthy older people who do not receive the higher allowances. Those affected will be older people who have built up private pensions and savings but still have only modest incomes. They will have a particular effect on people reaching 65 soon after April 2013 who may be planning their finances on the basis of a higher tax allowance and have little time to make changes. Despite all you may hear about those reaching retirement now being the lucky generation with great final salary pensions, the median (typical) income of a newly retired pensioner is in the region of £11,000.
As George Osborne points out, older people will gain from a £5.30 increase in the basic state pension and Age UK supports changes to the uprating of the basic state pension. But many older people on modest incomes have other concerns – for example high energy bills, low rates of savings interest and reduced access to services.
Following the waves of protests about these changes to age allowances some commentators have argued that this balances things up a bit as in general pensioners have been protected from cuts, but at Age UK we worry about pitting one generation against another. In many respects there is more inequality within age groups than between them. Each generation faces different challenges and we need systems that are fair within and across age groups. And reductions in support or increase in taxes need to be debated – not announced without full consultation and described as simplification.
Read Age UK’s full Budget briefing
Find out what the Budget means for you