People aged over 50 have been hit hard by the economic downturn according to a report commissioned by Saga, the consumer group for the older people.
“Baby boomers” coming up to their retirement are being stretched by above average inflation, higher unemployment, dwindling savings and falling incomes.
The report, compiled by the Centre for Economics and Business Research and the polling group Populus, found that real deposable income for the age group has fallen from £34,366 to £33,900 year-on-year.
Some 28% of the 13,000 over-50s questioned said that they felt their standard of living had deteriorated over the last year compared to just 8% who thought their financial situation had improved. Around 23% said they were not as happy as they were this time last year and 30% claimed that their health had deteriorated.
Using a weighted formula to account for the differences in spending patterns of older people, the report found that the annual rate of inflation for those aged between 50 and 64 was 3.5%. The consumer price index rose just 3.4% over the same period.
Those aged between 50 and 59, the generation most likely to still have dependent children and elderly parents, were the gloomiest about their situation with many still paying off a mortgage and seeing their savings wiped out by high inflation and low interest rates.
Ros Altmann, director-general of Saga, said: “I am surprised by the bleakness of the picture. People sometimes paint the older generation as ‘the lucky ones’ with fewer problems than others. The evidence does not support this view.
“Some are fine, but the majority are currently struggling and the worst affected are just short of retirement. Their pensions will not deliver the income they were expecting, their savings income has evaporated, and more are losing their jobs. Once out of work they find it hard to get back in. In short, their lives may never recover, but their plight has so far been ignored by policymakers.”
The report says that older people who lost their jobs during the recession are finding it much harder to find new ones. Despite the focus on youth unemployment, some 43% of unemployed people aged between 50 and 64 have been out of work for more than 12 months, compared with 27% of 18-24 year olds.
Ms Altmann said: “In theory you’d think this group of older workers would be more skilled and stand a better chance of gaining another job. In reality there are many who find the door shut in their face the moment the employers sees their date of birth. For many of them their life is effectively over. They are too proud to live on benefits, but their savings have been eroded by two years of record low interest rates.”
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