Almost a quarter of working over 50s are trying to make ends meet
New research from pension provider Friends Life reveals that almost a quarter (23%) of the working baby-boomer generation (over 50s) is focused on making ends meet in the current climate, when asked about their top financial priorities. This represents a marked change over the past decade, as just 14% indicated that making ends meet was at the top of their list of priorities ten years ago.
At a period in their working lives, when the focus should be on consolidating and planning for retirement, it is worrying that only 21% listed this as being their top financial priority. It is extremely important that people continue to save throughout their working life towards their retirement.
The survey of over 1600 over-50s still working shows that nearly two-thirds (65%) feel that they have less disposable income than a decade ago. Although this is in some ways unsurprising given the UK's recession, this is typically an age where adult children have moved out of home and people are closer to paying off their mortgages. However, further figures reveal that significant numbers (43.9%) of over 50s still have mortgages to pay off with an average amount of nearly £29,000 still to be paid. Worryingly, nearly a third (30%) of respondents still paying off a mortgage have over £50,000 left to pay and more than a tenth (13%) have over 10 years left of mortgage repayments still to come.
Today's top five financial priorities for over 50s still employed are:
1. Making ends meet 23%
2. Saving for retirement 21%
3. Holidays / other leisure activities 15%
4. Paying back debt 14%
5. Children / other family 9%
Top five financial priorities for the same respondents 10 years ago:
1. Children / other family 27%
2. Making ends meet 14%
3. Paying back debt 14%
4. Holidays / other leisure activities 14%
5. Saving for retirement 9%
Saving for retirement emerged as the second highest priority amongst this age group with more than 1 in 5 (21%) listing it as their main concern. Once again the research showed a marked increase on 10 years ago with only 9% recalling saving for retirement as a key concern back then. Concerns over paying back debt remained constant with 14% seeing it as their top financial priority both now and 10 years ago.
Colin Williams, Managing Director, Corporate Benefits at Friends Life comments: "The fact that almost a quarter of the working over-50 population are struggling to make ends meet is worrying. This period of life is a time when the focus should be on consolidating and planning for retirement, though it seems in reality substantial numbers are having to concentrate on simply getting by. While our research shows people are more focused on saving for their retirement than they were ten years ago, it is worrying that only 21% listed this as being one of their top five financial priorities.
"This just highlights the fact that it is more important than ever to get the message through that saving for retirement is crucial. If many are struggling to make ends meet whilst they are still working, then they may find themselves in more dire straits when they reach retirement, so early planning is critical."