Monday 3 September 2012

Britain is a country for more and more financially insolvent old men

An article in the 'Daily Mail' last week was entitled :

Bank of granny and granddad goes bust: Pensioner insolvencies to a record high

It made the following points, that :

* a report, by accountancy firm 'Wilkins Kennedy' and based on official 'Insolvency Service' figures, highlights how pensioners are ‘caught in a vice’ between high inflation and record low interest rates.

* the number of pensioners becoming insolvent has risen to its highest level since records began more than 50 years ago with 2,725 over-65s declared insolvent in 2006 but 5,749, in 2011, an increase of 111%.

* the rise among the over-65s is faster than among any of the younger age groups and the numbers will continue to climb.
* at the same time, increasing numbers of pensioners are funding the ‘bank of granny and granddad’ and rather than enjoying the fruits of retirement after a lifetime of work, are having to provide for not only their children but also their grandchildren.

* a survey by equity release firm 'Key Retirement Solutions' showed a third of clients aged over 65 had taken out money on the value of their home specifically to lend or give money to their family members.
* Ros Altmann, 'Director-General' of old-age experts Saga, said: ‘The financial cards are stacked against old people. Many, even if they have put money aside in the past, were relying on a good income from an endowment or an annuity which has let them down. Until the financial environment changes, such as interest rates going back to more ordinary levels, older people will face increasing personal insolvency rates.’

* a 65-year-old man who retires today with a pension pot of £100,000 would receive just a third of the pension which he would have got 20 years when he could have cashed in his pension pot and bought an annuity – an income for life – of £15,000 a year and today he would get a rock-bottom deal of about £5,700.

* record numbers of over-65s have a job, 'Office for National Statistics' revealed that about 930,000 people who have reached the ‘traditional’ retirement age of 65 still work, with many saying they cannot afford to stop.

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