Looking forward to retirement?

Probably not according to new research by retirement income specialists MGM Advantage. This highlights that UK workers are delaying retirement after seeing the value of their pension funds plummet.

A third of older workers in the UK have been forced to delay their retirement after seeing the value of pension funds and other investments dip in the recession. Apparently, around 35% of people aged over 55 who are still working said they had put off plans to retire while they waited for the value of their pension savings to recover. One in ten people said they were planning to boost their retirement pot by either releasing equity from their home or by moving to a smaller property. But the MGM survey found that many people are poorly prepared for retirement: one in five Britons who are within ten years of retiring have not started saving or making provision for their post-work years. Which doesn’t leave them with much time to build up that nest-egg… Not surprisingly, this is influencing how people feel about retirement. Whereas once workers might have been looking forward to retirement many are now expressing real concerns especially those in the 25-44 age group. And with good reason: some 44% of people who have now retired expressed regret about their financial decisions ahead of retirement, and 6% said that these regrets caused ‘real pain’. This pension panic isn’t just an issue affecting the UK’s senior citizens – it could have ramifications for the entire job market. Over a fifth of UK pensioners are now heading back to work – mainly due to financial problems, but also due to boredom. So young people, who are already being hit hardest by the rise in unemployment, are now facing extra competition for jobs from their grandparents. And even if they do get into work, they’re unlikely to have the benefit of final salary pension schemes (possibly any kind of pension scheme, in fact), or generous interest rates on their savings. So retirement is looking a lot less fun than it once did...

Baby gloomers!

A recent study by the Aviva Company in the UK says that over 60% of the population over 50 is worried about having enough pension and savings to get them through retirement. Thus the newly coined term ‘baby gloomers’.

The Department of Health is to be publishing a Green Paper this month outlining a new government policy on social long term care. David Behan, UK Director General for Social Care, will be presenting on Wednesday morning, 23 July, during IAHSA’s 8th International Conference in London. That will be an opportunity to learn more about the Green Paper.

Canada begins to think about upping retirement age to 70

An influential Canadian think tank, having examined all alternatives, is suggesting upping the state pension age to 70 asap. With Lord Turner suggesting that his earlier report on pensions in 2005 was far too optimistic a momentum is growing to tackle the issue that people cannot be expected to be supported by the State for 20 - 30 years at the end of their lives.

Half a million OAPs pay price of rate cuts

This is the title of a very disturbing article by Olinka Koster of the Daily Mail, reporting on statements from the National Pensioners Covention. In this she points out that the country's 8.5m pensioners with savings have lost massively through the base rate collapsing from 5% in October to 0.5% last week. This, they claim would push a further 50,000 older people below the poverty line - bringing the total in the past six months to an estimated 500,000.

Recession Tips 1& 2

We are starting a series of tips for the over 50's to help with weathering the growing storm. Most of us have lived through one or more of these before though maybe not so dramatic as this one may turn out to be.

1) Are you paying unnecessary tax on your bank or building society interest?

For the last week or so HMRC have been running a campaign to remind people who are not taxpayers - including many pensioners - that they should register with their bank/building society to get their interest paid without tax deduction. Banks & building societies take 20% tax off before paying their interest to their savers. So someone who is a non-taxpayer then has to claim it back from HMRC or they can register with the bank/building society (with a form R85) and get it paid without tax deduction. You can also get free tax advice from Tax Help for Older People if your household income is less than £15,000 per year and you are a pensioner.

2) Make sure you are not paying national insurance once you have reached state pension age. This is particularly important if you have been or are still self employed.