As the number of working-age people in early retirement hits a record low of just over one million, the lowest number since 19941, new research has found that 25% of 55–64-year-olds say the rising cost of living is likely to result in them having to put retirement plans on hold in the next year, while 22% aged 55-64 who have retired, may have to come out of retirement and work in the next 12 months.
In addition, according to Over50choices, 38% of people aged 55-64 and 12% of 65+ who are still working, may have to work more hours to make ends meet. This comes as the Office for National Statistics this week announced that the number of people under 64 who are in retirement fell by 93,000 in the last 12 months.
Over50choices’ Boomer Barometer – a new study among people aged 55+ in the UK – has looked at the impact the rising cost of living is set to have on older people in the year ahead. It has also found that 35% of people aged 55-64 years, and a further 20% of people aged 65+ admit they will struggle to pay their bills in the year ahead, while 22% of people aged 55-64 and 11% aged 65+, who pay rent or still have a mortgage, say they will struggle to afford it in the year ahead.
The Barometer found that 43% of 55–64-year-olds and 33% of those aged 65+ will be relying on savings to pay for things it wasn’t intended for, while 14% of people aged 55-64 and 7% of 65+ say they will need to use credit to pay for things they need.
While just 6% of over-55 homeowners say they will consider equity release in the next year, this rises to 17% of those with a mortgage. Similarly, 10% of over 55s are considering selling or downsizing their home this year but this again jumps to 25% of homeowners who still have a mortgage.
Ashley Shepherd, founder and managing director at Over50choices, said: “Our new Boomer Barometer shows just how much impact the cost-of-living crisis is having on people in, or nearing, retirement. One in four of over-55s say they will struggle to pay their bills this year, with many being forced to eat into their savings and some having to resort to credit to pay for things they need. Furthermore, many look set to change their retirement plans to ensure they have sufficient income to keep them afloat.
“A fifth of over-55 homeowners who still have an outstanding mortgage, also look set to consider equity release this year to help them navigate the cost-of-living crisis. The popularity of equity release has risen substantially in recent years with over £6.2bn borrowed in 2022 alone; a record year, up 23% year-on-year.
“Our research has shown that the majority of the over-55s in the UK still don’t fully understand how equity release works and that it’s a highly regulated and safe guarded product. We want to educate and empower consumers to help them be as informed as they can and have created calculators and tools to help them on their journey.”