The global economic crisis has hit all of the generations, according to a recent survey by Liverpool Victoria (LV=). But whilst there has been lots of media coverage of the way in which school leavers and recent graduates are entering a world that is devoid of jobs, people over 50 have been quietly getting on with their lives – but not saving as much as they should for their retirement.
During the past 12 months, £18 billion less has been invested by that age group, according to LV=’s annual State of Retirement survey. It seems that the over 50s have found their funds diverted to day to day living expenses, rather than making extra pension contributions.
According to the survey, one in five of those asked have reduced the amount that they save per month by £324.
Last year, the average reduction in savings was £137 per month. The fact that this amount has doubled this year gives some indication of how desperate that age group feels about their finances.
The survey found that one in three of those over 50 were relying on an upturn in the economy to recue their retirement plans. When you look at the figures for the over 60s, the percentage of those living on hope is higher – 46%. No further information is available, but it could be argued that this age range is the one that may be more property focussed, and therefore be more affected by a house price dip.
A rather worrying statistic was the 15% of those surveyed who will be fully reliant on the state to keep them in their old age.
So what action has this age group taken to plan for their retirement? Only one in five have consulted an independent financial adviser, according to LV=’s figures.
No reason was given for why the other four out of five have not spoken to anyone about their finances. Perhaps they were concerned about mis-selling scandals or the cost of the fees. One thing that is for certain is that the cost of doing nothing about your retirement planning will be more than an hour or so of an adviser’s time!
