Credit, collections & insolvency news
A quarter of a million older workers have stopped making pension contributions to make ends meet during the pandemic, according to new study by SunLife.
According to Sunlife’s ‘Finances After 50’ research, before the crisis, around 22% working people over 55 were making regular contributions into a personal pension, UK-wide, this is equivalent to 2.4million people. On average they are investing £147.49 per month.
But recent research has revealed that 11% of over 55s had stopped making pension contributions altogether during the crisis, which is equivalent to more than 270,000 people, while a further 5% said they have reduced their contributions.
This means that over the past six months, potentially hundreds of millions of pounds that would usually have been invested in pension pots has not been. Given that the average contribution is just under £150 a month (£1,767 a year), collectively, around £40million that would usually be paid into pension pots each month is now not being invested at all. Over six months, that is more than £140million.
Simon Stanney, Equity Release Director at SunLife said “Our research shows that 28% of over 55s don’t have private pensions, of those that do, just 22% are still paying in regularly”.
“And now we know that 16% of them have either stopped or reduced their payments because of the crisis.”
Stanney says while many older people may be concerned about their financial future, for those who are homeowners, there may be another option. Older homeowners have seen their homes more than double in value over the past 20 years, from an average of £113,365 in 2000 to £240,681 today. “Our research shows that one in five older homeowners are already planning to use their property to fund their retirement, by either downsizing or via equity release. For homeowners age 55+ who need to boost their finances but don’t want to move, equity release can offer a solution.”
Main finding from the report: