Retirement no golden age in UK as pensions drop while costs rise
10 Jan, 2011 06:49
British pensioners are going bankrupt faster than any other group in the UK, and the country’s Insolvency Service findings highlight how seriously those over 65 are struggling to keep their homes running, as costs rise.
Retirement is depicted as a golden age, where older people get more time to enjoy their families and hobbies. But a new survey shows a different side to old age in Britain – a worrying picture of a country where more and more elderly people cannot afford to retire. Pensioner Lydia Portsmouth will not say how much money she gets from the state, but she is forced to dip into her limited savings to pay her monthly bills. Like many others, she was not able to put away a lot of money for her retirement, and what she does have is now earning so little interest in the bank, that she regularly has to spend the capital.“That money keeps my house going, if you know what I mean… That pays the bills and then I live on my pension and try to put a bit away,” says Lydia Portsmouth. “I try to make up for the money that is coming up because nothing’s going back in again, and it’s getting lower and lower. In the end I would have to sell the house.”However, Lydia is one of the lucky one: she owns her own home, and has a small amount of savings.Data from the Office for National Statistics shows more than half of single pensioners in the UK live on the equivalent of less than $45 a day, with nearly a quarter of a million getting by on half that. The Consumer Credit Counselling Service helps people to repay debt when they get into trouble. They are seeing an increasing number of older people with huge credit card debts, and no way to repay them. And they say life is only going to get more difficult.“They are going to get worse, in so far as all costs are going to be going up,” says Malcolm Hunster, director of the Consumer Credit Counselling Service.“It’s very unlikely that the payments on the state that other people receive will go up as quickly as the costs of the things they’re gonna have to buy, so that’s going to be a problem.”It is a bleak picture for pensioners present and future. Rock bottom interest rates mean the elderly can no longer live off the interest from their nest eggs, if they have any. And interest rates may not go up for several years. A new pension scheme which will oblige employers to pay into a fund for all their employees is not due to come online until 2012. As a result, seven out of ten people in the UK cannot envisage a traditional retirement in the future, where people stop work and live off their pensions for 30 years. Every year the government raises the pension age – currently 60 for women and 65 for men – it stands to save itself 20 billion US dollars.The government plans to up the pension age again, both to combat government debt, and respond to rising life expectancy. The UK is experiencing a fierce winter, and many pensioners struggle to pay heating bills. It is unlikely to get any easier for older people. While the wealthy can sail off in their yachts at whatever age they want, critics say the poor will not have that option and may have to work until they drop.