Expert shares the 3 biggest financial issues facing the elderly | Personal Finance | Finance
These three financial issues are the most prevalent facing the elderly today and you can avoid these problems by planning now.
Financial planner at Quilter Financial Advisers, Jordan Clark, 31, said these problems are causing the most difficulty for retired Brits and impacting choices available in later life.
Mr Clark said: “The first issue is the rise in people not owning their own home later in life. Retirement should be the point where your biggest cost, which for a lot of people is your mortgage or your rent, is basically no longer an expense.
“For most people near retirement, their other expenses usually aren’t that great. So once the mortgage has been paid off that’s usually for a lot of people the biggest cost gone.
“This provides a lot more opportunities to them in terms of early retirement and those sorts of things. So what we’re seeing now is sort of a generational decline in home ownership or people buying their first homes later in life.”
Mr Clark said that in 2003, 59% of people between the age of 25 and 34 were homeowners, which fell to 41% in 2019, so there has been a drop of 18% in people owning their own homes.
Another issue facing the elderly is that people have not saved up enough of a personal pension, says Mr Clark.
He said: “This winter, one issue is that some people generally have not saved up enough of a personal pension and are relying on state pension support.
“In normal times, the state pension for a lot of people is just about maybe enough to cover the basics. But then when you add things such as high electricity costs and inflation that we’ve experienced over the past few years into the mix, it’s just probably for most people just not quite covering it.
“With the Winter Fuel Payment taken away and with no personal pension on the side to top that income up would cause a lot of issues for people in terms of just having that money available to pay bills.
“Retirement is meant to be about enjoying yourself as well – not about just surviving.”
The final issue impacting the elderly is affording adult social care.
Mr Clark said: “A lot of people just don’t have enough money to fund social care, especially for lower earners, you get to retirement and you’re just focusing on funding that to start with.
“Nobody really thinks too far into the future and how much care costs could be and what might be to come.
“The average cost of a local authority funded care home place for someone over the age of 65 is about £842 a week.
“Now, if you’re relying on the state pension alone, you’re getting just a bit more than that per month.
“If you don’t have a personal pension there to fund the care costs, it’s essentially sort of impossible, really.
“And then what happens after that are difficult decisions in terms of potentially selling the family home and things like that to cover care costs. So that’s another big challenge people in retirement face.”
Mr Clark recognises these three issues to be the most notable challenges facing the elderly but my planning now, you can avoid added financial stresses.
