Rise in over-55s worried about retirement finances

The proportion of homeowners over the age of 55 who are worried about running out of money in retirement has jumped to 34%, up from 27% a year ago.

A new report, published by the Equity Release Council and Key, suggested that these concerns are rising fastest among men, having risen nine percentage points over the last year to 32%.

However, women who are still working remain the most anxious (48%) – the highest proportion of any group in the study.

The findings were based on research among 3,415 UK homeowners aged 55 and over across two waves – the first by Censuswide in October 2019, and the second by Opinion Matters in September 2020.

The report also revealed that women feel they have less power over choosing when they can retire. Less than half (41%) women still working are confident they will be able to afford to choose when they retire, compared to a majority (56%) of men still working.

Furthermore, the research found that 48% of older homeowners are worried about falling ill and having to pay for care, which was up from 39% a year earlier, while 24% are worried about having to sell their home, up from 18% last year. Women were also most affected by this concern, with 26% compared to 21% of men.

Equity Release Council chairman, David Burrowes, suggested the research reveals that women are experiencing an “acute crisis in confidence” about achieving a comfortable retirement.

“Women are faced with a disproportionately bigger challenge in building a nest egg for later life,” Burrowes commented. “This is driven by the perfect storm of longer life expectancies and gender differences in earnings, savings and working patterns.

“Yet despite this, women are also less likely than men to consider later life lending products when facing a retirement funding shortfall. A more holistic approach to financial planning is needed now more than ever, as an over-reliance on pensions alone will make it harder to maintain living standards in later life.

“Looking ahead, there are important steps we can take to help strengthen people’s confidence ahead of retirement. Encouraging them to consider a range of funding options could improve their prospects of achieving greater financial security.”

Key CEO, Will Hale, added that the concerns outlined in the report are being “exacerbated” by the impact of the coronavirus pandemic.

“Women who are disproportionately represented in hard-hit industries like hospitality and retail are already finding that their lower average salaries mean they are more financially vulnerable in retirement but both genders have been hit and are concerned about the future,” Hale said.

“Now more than ever it is important to take a holistic look at retirement finances and ensure that you are using all your assets to their full potential. For most over-55s, their home is worth more than their workplace pension so it is vital that this potential source of financial support in retirement is fully considered.”

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