The Challenge of Poverty in old age

September 30, 2019

A worrying new report has recently revealed a rise in the number of elderly people living in ‘severe poverty’. Enable’s IFAs in Bishops Stortford have long sung the benefits of saving for a pension and starting to save as early as possible. This recent study only highlights the need to address this kind of financial planning as early as you can. 

Pension challenge

The report from The Pension Reforms and Old Age Inequalities in Europe study suggests that the proportion of elderly people living in severe poverty in the UK has gone from one of the lowest in Western Europe to one of the highest in the last 30 years. It found that, in 2015/16, one in 20 (5%) of British elders are forced to live on an income that was less than 40% of the UK median average income compared to just one in 100 back in 1984/85.

The study suggests that the biggest cause for the declining standard of living in the UK is due to the State Pension system. The state pension is still there for people but its low basic payments and means-tested supplements are not really sufficient explains Professor Bernhard Ebbinghaus, author of the report. The result is ‘Basic security and meagre pensions’.

“The lowest poverty rates are found in the relatively generous Dutch and Danish basic pensions,” Ebbinghaus also said in the report. “In contrast, Ireland, the UK and Switzerland, with basic security and Belgium, Greece, Italy and Spain, as well as Slovenia, with meagre pensions, have the highest poverty rates, coming close to US levels.”

If you want to make sure you can make ends meet in retirement, the first thing to do is make sure you are saving as much as you can as early as you can. Enable’s IFAs can help you find the best ways to invest for your retirement.

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individually tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain.

Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.

 

https://www.lovemoney.com/news/87867/severe-poverty-uk-elderly-western-europe-study

< Back