Around 9m Brits aged 50 and over have seen their cost of living rise, with 1.7m over-55s expecting to have to keep working indefinitely to make ends meet.
These are just two of many sobering statistics recently collected by the Office of National Statistics (ONS) on household finances in Great Britain during the cost of living crisis.
Although inflation is now gradually falling, it remains considerably higher than the government’s 2% target, placing considerable financial pressure on countless households.
A new report from Age UK has analysed the ONS data to come up with a new report titled ‘Tackling the cost of living crisis: what the government must do,’ which urges the government to take stronger action to protect vulnerable people against the high cost of living.
Savings, debt and personal finance
The Age UK report paints a bleak picture of many people’s savings and relationship with debt.
Nearly half (42%) of over-50s in Great Britain expressed doubt that they would be able to save any money in the next 12 months, while a quarter claimed they could not afford a sudden necessary expense of £850 if one were to arise. Over a million over-50s said they had had a direct debit, standing order or bill in the past month that they could not pay.
Around half of those who responded to Age UK’s survey said they had already spent a “significant amount” of their savings, and a “worrying number” claimed they had been forced to start using credit cards to meet their living costs.
The data also showed that one in five people aged between 50 and 69 had had to borrow more money or use more credit than usual in the past month compared to just a year ago.
It’s no wonder that debt has become such a huge problem, with half of over-55s in the UK now in some kind of debt. If you are struggling with debt, it’s important not to feel ashamed or alone – there are many ways you can seek help. Find out where to get started in our article How to take control of your debts.
Energy and household bills
It’s no secret that household bills are proving devastating for budgets at the moment, with soaring food and energy costs proving especially challenging.
Almost half (45%) of Brits over 50, equivalent to around 11.3m people, said they were finding it difficult to afford their energy bills. The majority of people had experienced an increase in their cost of living over the course of just one month, with a third of over 70s forced to spend less on food or other essentials.
Speaking to campaigners, Age UK heard from over 10,000 people who said that either their or a loved one’s finances had been “seriously affected” by energy bills.
There is some hope that with the cost of energy finally on the way down, competitive fixed tariffs may return to the market soon, and households may finally get some relief from high energy bills. However, none have appeared just yet.
You can find out how you might be able to save money on your energy bills in our guide here. Or, if you are really struggling to keep up with your payments, read our articles Are you eligible for help with heating costs? and What can you do if you can’t pay your energy bills? for more guidance.
Remember that you may be eligible for a £140 discount off your energy bills this winter under the Warm Home Discount scheme, if your supplier belongs to it and you are receiving the Guarantee Credit element of Pension Credit, or you’re on a low income and receive certain means-tested benefits. To check which energy suppliers offer the discount, you can visit GOV.UK.
Additionally, during particularly cold weather, you may be eligible for Cold Weather Payments of £25. These are made when your local temperature is recorded as (or forecast to be), an average of zero degrees celsius or below for at least seven consecutive days between 1 November and 31 March every year.
Work and retirement
Swathes of people reaching retirement age with partial or full National Insurance Contributions are still finding themselves unable to retire, with little in the way of retirement savings and no choice but to return to work.
Analysis conducted by Rest Less found that the number of over-50s with a second job had gone up by over 100,000 over the past decade, and that the number of men over 70 in work had increased by 58% over the same period.
Financial services company Legal & General found that 1.7m over-55s expect to have to keep working “indefinitely” due to a lack of retirement savings or rising living costs. On average, people aged 55 or over and still working were planning to delay retirement by nearly three years, with the majority saying they simply could not afford the drop in income in the current economic climate.
Further research commissioned by Age UK found that 400,000 people aged 60 to 65, or a member of their household, had recently had to delay retirement, return to work or work more in order to supplement their income.
If you have reached State Pension age and are on a low income, you may be eligible for Pension Credit. Around one in three households that qualify for this benefit don’t claim it, so it’s vital to check your eligibility in case you are missing out on a source of financial help. Read more about Pension Credit and how to claim it in our article Pension Credit explained.
If you’re thinking about getting independent financial advice, financial services company Fidelius is offering Rest Less members a free initial consultation with an independent financial advisor to chat about your finances, where you are now, and where you want to go.
There’s no obligation, but if they feel you’d benefit from paid financial advice, they’ll go over how that works and the charges involved. Fidelius is rated 4.7/5 from over 1,000 reviews on VouchedFor, the review site for financial advisors.
Mortgage payments and rent
A series of interest rate rises since December 2021 have seen many homeowners on variable rate mortgages take a tremendous hit to their finances, and the effects are often felt by those renting as well, as landlords pass on increases. Half (50%) of Brits aged between 50 and 60 who either rent or have a mortgage are struggling to pay their housing costs, according to the ONS.
While many associate mid and later life with mortgage-free home ownership, this is of course not the case for many. Nearly one in 10 (8.1%) of homes inhabited by someone over 60 are mortgaged, according to Age UK, and one in five over-55s expect to still be paying their mortgage after they turn 70.
Over-50s are the most affected by soaring mortgage rates, as they are the most likely to be on a variable rate from their lender. At the same time, those in older age groups often face more limited options if they wish to remortgage or extend their mortgage term compared to their younger counterparts. You can read more about your mortgage options after you turn 50 in our articles Mortgages for over 50s: what you need to know and Mortgages for over 60s: what you need to know.
If you’re struggling to keep up with your mortgage payments due to rising costs, check out our article Five strategies to survive soaring mortgage payments.
If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
Sources of help if you’re struggling
It’s clear that most people are feeling the burn from the cost of living crisis, but please don’t suffer in silence.
It’s vital to seek help where you can. Our Ways to save money and Cost of living resources sections contain some useful articles on ways to cut costs and save money, to help you weather the current economic turmoil.
If you are struggling with any form of debt, there are many sources of free advice available and several charities and organisations that may be able to help you negotiate repayment plans with your creditors. These include:
- Citizens Advice – 0800 144 8848 (England) 0800 702 2020 (Wales)
- StepChange – 0800 138 1111
- National Debtline – 0808 808 4000
- PayPlan – 0800 280 2816
Rest Less Money is on Instagram! Check out our account and give us a follow @rest_less_uk_money for all the latest Money News, updated daily.