However, they are not alone – plummeting property prices have also impacted those who have already retired.
Almost 1.7 million pensioners (14%) are relying on property to fund their old age at least in part. Sadly, this group alone has already seen just over £46billion disappear from their retirement fund in just 12 months as the average house price has dropped more than £28,000 (15.7%) to £150,946.
As a result, those who are approaching retirement age are concerned for their future plans – just over one in ten 55–64 year olds think that they cannot afford to retire. Worryingly, 18% of over 65s who are still working say that they cannot afford to retire either.
While life expectancy continues to increase year-on-year, the amount that people are saving is at its lowest level for almost 20 years, indicating an uncertain future for the next generation of pensioners. In 2006, the average working person saved £1288 per annum, but in 2007 this plummeted by almost 40% to £776.
As it stands, half of the working population (54%) is saving less than £100 a month for their retirement and 25% of people currently contribute nothing whatsoever. This leaves more than half of UK consumers unprepared for retirement. Worryingly, people who are approaching retirement fall into this bracket too – 17% of 45-54 year olds and 14% of 55–64 year olds have not started saving for their retirement yet.
The implications of not saving enough or soon enough are clear – retirement could be delayed or even put on hold permanently, raising the spectre of working far beyond 65. Of those who have already retired, 20% had to delay their retirement – 8% of these had to carry on working for a further five to seven years.
This reality is starting to hit home among those approaching retirement – 20% of 55–64 year olds think that they won’t be in a position to retire until they are at least 66 years old, with 6% predicting that it will not happen until they reach at least 69 years old.
The average working person is now expected to live for almost 22 years past retirement, and by 2050 the average life expectancy will have shot up to 95 years – an increase of more than 5% from today. With less money saved for retirement and the impact of today’s slump on the stock market and property prices, it is no surprise that nearly three quarters (72%) of the working population are worried that they will not be able to afford a decent quality of life for themselves in old age.
Ann Robinson, Director of Consumer Policy at uSwitch.com, said: "Falling house prices coupled with the stock market crash and low savings rates have combined to take the wind out of the sails of many of those approaching retirement. The economic situation will hopefully right itself in time, but unfortunately time is a luxury those who are a few years away from retirement don’t have. Despite the 0.9% property price increase reported today, this is a drop in the ocean compared to the overall 15.7% decrease in prices over the last 12 months.
"There isn’t an instant solution, but that doesn’t mean people should just bury their heads in the sand. They should still be planning and making sure that they are on the best financial footing possible.
"With savings rates so low, those who aim to retire within the next few years could concentrate on clearing any debt. Those with longer to play with should ensure that they are making contributions to a pension plan so that they can enjoy the tax benefits. And everyone can benefit by freeing up as much cash as possible by making sure that they are not overpaying on household bills and services – this money could be put to much better use."
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