Pensioner looking to return to work to pay soaring bills
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Britons are grappling with the rising cost of living, combined with the financial shocks of the pandemic. However, experts have said these individuals could face a lifetime of financial insecurity as a result, and a severely damaged retirement.
Research undertaken by the University of Edinburgh’s Smart Data Foundry, supported by abrdn Financial Fairness trust has painted a picture of economic inactivity, financial vulnerability and a need for support.
The findings uncovered people in their 50s and 60s are often facing challenges such as redundancy, ill health and caring commitments.
Coupled with a lack of savings and pension planning, the experts have said this is a “perfect storm” of circumstances.
Some are facing struggles which mean they are turning towards their pension, withdrawing lump sums to get by.
However, with the majority of pension pots worth under £30,000, this is causing severe knock-on effects in terms of income tax and entitlement to benefits.
Dame Julia Unwin, Chair of Smart Data Foundry, said: “We are seeing a pattern of people in their early to mid-fifties going from being in positions of comfortable, middle-aged breadwinners eyeing their future retirement over the horizon, to a generation suddenly finding themselves facing long-term financial hardship.
“A combination of being unable to secure viable work, confused messaging over pensions, little by way of state aid, and the savage cost-of-living rise resulting in many making decisions that could have long-term negative consequences.
“With this report and our key recommendations, we are calling for UK Government to intervene to protect and support the most vulnerable before it is too late.
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“If they don’t act now, we will undoubtedly see even bigger problems in the years ahead.
“Data doesn’t lie; the evidence is there – older workers are at very real risk of financial vulnerability.
“But it is not yet too late to act.”
The Smart Data Foundry is now calling on the Government to act to reduce the risk of pension assets being spent before retirement.
It has also recommended an increase to the current capital limit of £16,000 – the cut off point for means-tested benefits eligibility.
The report also stresses more needs to be done in the way of reducing pensioner poverty.
It suggests a reinstatement of Pension Credit for mixed-age couples on Universal Credit to tackle this.
Making decisions about one’s pension income can be a complicated endeavour.
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As life expectancy increases, many people will be planning for their income to stretch for more years than ever before.
Consequently, Britons are usually encouraged to seek financial advice, either through an independent advisor or the Government’s PensionWise service.
These experts can often provide a tailored outlook on how to approach one’s retirement planning.
Express.co.uk has contacted the Department for Work and Pensions (DWP) for comment.
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