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The Challenge of Poverty in old age

Pension challenge

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. 

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.

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