Ageing Better highlights the growing numbers of people in their 60s enduring financial insecurity
The UK Government needs to invest in technology to drive up low Pension Credit take-up to better protect the growing numbers of people in their 60s enduring financial insecurity, advocates a new report to be published later this month.
The Centre for Ageing Better is calling on the government to help increase the numbers claiming Pension Credit by moving towards more automatic take up of the benefit using data matching and pre-filled claims.
More than 900,000 households are estimated to be missing out on more than £2 billion worth of Pension Credit – support that is increasingly in demand for the 1.8 million financially insecure people either entering, or on the cusp of, retirement in the 60-69 age group.
Lack of awareness, high levels of bureaucracy and stigma are all known reasons why Pension Credit take-up is so low.
The new Tale of Two 60s report from the Centre for Ageing Better highlights the need for greater pension support and advice as financial insecurity grows amongst people in their 60s with more than one in four (29%) of the age group in precarious circumstances characterised by financial insecurity.
The report details how being in a state of financial insecurity hampers more than a quarter of the 60-69 population from saving for their pensions with only half as likely to be in work compared to their financially secure peers.
People in their 60s are also more than three times as likely to be caring as their primary activity, and more than four times as likely have fair or poor health.
The ability for the financially insecure to save for the future has been further hampered by a series of cost-of-living crises in recent years including Brexit, Covid, and the conflicts in Ukraine and Iran.
Henry Allingham, Research and Evaluation Manager at the Centre for Ageing Better, said: “A large minority of people in their 60s are finding themselves trapped in a vicious cycle of financial precarity causing under-preparation for later life, which leaves them falling into deepening hardship.
“Persistent short-term financial pressures act as insurmountable barriers to saving for the most financially insecure, preventing people from engaging in long-term planning around finances as they are conditioned to focus purely on short-term survival.
“It is difficult for people to understand and prepare for an uncertain future. People often find it challenging to consider what their later life will be like and therefore to adequately plan and save for an unknown later life. For those facing precarity, this has severe consequences leaving them financially vulnerable as they age.
“More support is needed to ensure people are equipped to understand and prepare for the potential outcomes of later life.”
The Centre for Ageing Better report outlines a number of ways that the financially insecure in their 60s could be better supported to avoid pensioner poverty including strengthening financial support for those approaching state pension age who cannot work.
Ageing Better suggests improving financial security for people in their 60s who rely for those reliant on state income alone by making this group an explicit focus of the Second Pensions Commission and the third State Pension Age Review. giving explicit focus to this group.
Dr Andrea Barry, Deputy Director for Work, Retirement and Transitions at the Centre for Ageing Better, said: “The Tale of Two 60s series of reports has highlighted the scale of financial insecurity among people in their 60s.
“We need a range of immediate and long-term interventions to protect those who are entering later life with the least resource. Improving take-up of Pension Credit is one relatively immediate measure that could prove to be a valuable lifeline for those enduring financial insecurity now.
“But the issue will require a long-term focus as well because there is a further and larger crisis of under-preparation for later life coming down the tracks.
“There is a perfect storm for growing pensioner poverty growing with future cohorts not adequately planning and saving for later life, rising numbers of private renters approaching later life and increases to the state pension age.
“We don’t want people to be reliant on clinging to the life raft of state pension in later life, but to be given greater opportunity to build a sturdy boat for themselves to weather any storms.
“The government should ensure people have the information they need to plan for later life. Our research participants highlight the significant appetite there is for support to prepare.
“Many of the people we spoke to not only expressed a strong desire for more support but were disappointed they had not received it. For this group there was a sense that they had been forgotten.
“To address this problem, the government should tackle low understanding and uptake of vital systems. This could be addressed by prompting people at key risk points such as leaving work, cutting hours, or starting caring, alongside making state pension record checks easier to identify and complete.”
The Centre for Ageing Better recently launched a new campaign urging the UK Government to keep track on the number of 50+ people not in education, training, employment or retirement (NETER).
