It seems that many of the UK pensioners are facing greater financial hardships as they get older, a new study has revealed.
The report states that pensioners are suffering from the growing costs throughout retirement. It seems that during retirement, those in their 60’s are still active and require high levels of income, whereas those in their 70’s are less active, so their income needs drop. Then as they approach their 80’s and 90’s, more pensioners face disability, widowhood or the need for some sort of long term care. These factors are contributing to growing costs in later years, but pension income does not directly consider the health of pensioners in later years and the dependency on a pension.
The government has pledged to increase state pensions in line with rising earnings, but second pensions and private pensions are more likely to increase with inflation, which is lower.
The Pensions Policy Institution (PPI) has said that pensioners will need a range of assets with which to draw funds from in later life and to support additional living expenses.
Age Concern have voiced their opinion and have said that the government cannot ignore the ‘ageing society and the financial cost of people living longer’. Age Concern have said that the main problems are with a ‘crumbling social care system’ and the need for a cash injection of around £1 billion and a long hard look at radical and long term reforms.
Simon Webb, Liberal Democrat spokesman for pensions and work has stated that the basic state pension really is far too little for any of the millions of pensioners to live off. There are calls for more generous and universal pensions based on citizenship – which would apparently give pensioners enough to live on, regardless of age.
Another option for pensioners is early pension release of personal or company pension and re-investing the money in a higher interest account, providing financial security in later life.