Recent studies reveal that millions of the countries older workers are dipping into their personal savings far too early, in order to deal with the rising cost of living in the United Kingdom.
Shockingly, two out of five older workers are now finding themselves unable to put any money away, and many are having to draw from their pre-existing savings in order to stay afloat. Sources now estimate that a total £20 billion has been withdrawn from personal nest eggs throughout Britain, in order to combat the effects of the recent economic crisis.
Harsh Times for Over 55s
With studies suggesting average monthly outgoings of around £1300 for UK citizens over age 55, the current economic situation is statistically the worst it’s been in the last five years. And the reasons are plain to see. Rocketing energy prices, substantial increases in the cost of food and petrol are all seen as playing a key role in this crisis.
Similarly, pay freezes and reduced hours are also having a detrimental effect on the financial stability of over 55s, forcing them to dip further and further into their pension savings. Astoundingly, a total of one in every five British citizens between the ages of 55 and 64 – around 1.5 million people – have absolutely zero savings or investments to fall back on. A worrying statistical for such an allegedly developed western nation. Individuals such as this will likely struggle to live on the state pension, and will have to find other means of income to support themselves.
What Are the Solutions?
Surely there can be no immediate solution for this crisis, given that it is tied to so many external financial and social issues. Many older citizens are finding that the only way to deal with the situation is by using the equity in their own homes to fund their retirement. Of course, this is by no means a desirable situation and it sounds a warning bell for the future.
Chairman of the Equity Release Council, Nigel Waterson, recently stated that “With expenses rising and incomes also failing among pre-retirees, it may be the case that the current generation of retirees are the last to have such freedom to help their families out financially; others may have more of an immediate personal need”, reflecting the view that the future of pensions does indeed appear bleak and uncertain.
Whilst no clear solution is evident right now, certainly those considering their retirement, however far in the future, should start acting now by contacting a wealth manager. A company like Pensions and Wealth Management Services can offer a plan to create stability and security for your future finances. The earlier you start planning your finances as a whole, rather than focusing on certain areas as the need arises, means that you will be confident in your financial situation as you approach later life. If you are thinking of retiring within the next few years, a wealth manager will help you consider your immediate options, i.e. whether you have enough to live on and what you can do to help ease the situation.