Mervyn Kohler, Age UK’s External Affairs Adviser, looks at what the Budget means for savers, the social care system and our hopelessly energy-inefficient housing stock.
In its tone and delivery, the Budget speech sounded good news for pensioners, and there is much to applaud in the Government’s proposals. But before getting carried away with enthusiasm it’s important to take a cool look at what we mean by ‘pensioners’.
Retired people with savings who have seen desperately poor returns on their investments will welcome the National Savings Pensioner Bond from next January, the simplification of ISAs and their raised savings limits.
Older people coming up to retirement can appreciate the proposed flexibilities around their pension savings, and the increases in the lump sums they are allowed to draw. But they must be careful to strike a balance between the resources they use to spend now, rather than fund their (hopefully) long lives at an appropriate level. Unfortunately these savings can only be used once! Continue reading “The Budget 2014 – a first take”
Last week Age UK launched the second edition of its Economic Tracker . This addition includes the result of the first wave of a survey we have developed to track older peoples’ views on the economy and their financial situation.
It received quite a lot of coverage in the media, particularly because of the startling statistic the nearly a quarter of people in their early 50s were worried about losing their home as a result of falling behind with mortgage repayments. Like other age groups many older people are suffering a fall in income in the current period of austerity and this is having an impact on their well-being.
- Over three million people aged 50+ are very worried about the cost of living. This is in the context of rapidly increasing prices for some essential items, especially utilities, which we know have a significant impact on older people’s finances.
- Only thirty-eight per cent of 50+ say the future looks good for them
- 35% feel worse off financially compared to last year (see chart below)
Since our first edition, the UK economy and economic policy have given us food for thought. There are concerns, disappointments, and one or two silver linings. As our polling data suggests the economic situation is particularly worrying for many of those approaching retirement, tomorrow’s pensioners, who find it more difficult to find a job following redundancy. Our analysis has found that older workers are more likely to be made redundant when compared to those aged between 24 – 49. This translates into higher proportions of older unemployed workers being out of work for longer. Forty-seven per cent of unemployed people aged 50 – 64 have been out of work for 12 months or more compared to thirty-seven per cent of people aged between 25 and 49. The situation of older people is not as bad as those between 16 – 24, but it is important to highlight that all ages are struggling in these tough economic times.
Quite rightly there is a lot of attention on the young unemployed at the moment, but we must ensure that those over 50 are not forgotten. More can be done by the Government and employers to recognise the value of workers over 50 (the experience and skills that come with a longer working life), provide more training and learning for those in later life, and do more to eliminate the ageism that too often occurs in workplaces.
Read more about the impact of the economy on the financial well-being of older people
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A demographic revolution is under way, with more of us living longer than ever before. Fifty years ago there were nearly 20 million people in the world age 80 or over; now that figure stands at about 105 million, and it’s rising fast. Many – though not enough – of our older population are in good health and will retire with a decent income and a strong social network, and many have much to offer society.
The timing of the debate around the aging population in the UK is then perhaps unfortunate, held as it is against a backdrop of a beleaguered economy. Since the Coalition Government came to power we have seen cuts to government services and working-age benefits and a further £10 billion reduction in welfare to come. Against this context there is a perception that older people have fared better than most other groups but media commentary suggesting that today’s older people belong to “the lucky generation” obscure the enormous variations that exist. This is particularly stark in terms of poverty and wealth – fewer than half of all retirees have an income big enough to pay income tax. Older people’s median income levels remain lower than those of the population as a whole. Continue reading “UK life reimagined”
When Andrew Dilnot published his proposals on funding social care, he envisaged that a better, fairer system would require extra funding from public expenditure, and observed that since older people would be the principal beneficiaries, it would be preferable if this was raised by taxes which older people contribute to so that not all the cost would fall on the younger population.
Since then, a variety of ideas have been floated from a range of different quarters. But the discussion has also become conflated with views about intergenerational fairness as the Government tries to bear down on public spending, and comments about the ‘generosity’ of some universal benefits received by pensioners. There has long been a rumble of complaint that rich pensioners receive the Winter Fuel Payment. Frank Field waded in, arguing that before we find more money for older people, we should be looking at the poverty and the shortage of opportunities for children. The Lib Dem think tank CentreForum published a paper looking at the tax reliefs available to older people and their exemption from National Insurance if they are working over State Pension Age. Now, in the margins of the Lib Dem and Labour Conferences, the appropriateness of pensioners’ benefits has again bubbled up, though the Coalition Agreement specifically protects these till 2015. Continue reading “Squeezing the rich pensioners”