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Being older: Financial resources

Most people in the UK live for about 80 years, and work for about 40 – 50 years: it follows that they have to spread their earnings to cover both their retirement years, and the upbringing of the next generation. In retirement this is covered by capital and pensions, and possession of these varies very considerably, both in terms of people’s previous lives and employment, and also according to their age: the older people are, the lower their income and wealth tends to be, as the value of their pensions depreciates and their capital runs down.

Pensions come partly from the State, where regulations to entitlement have varied substantially over time: there are currently government proposals to standardise all state pensions at £144 per week from 2016. In addition, many people have private pensions, either from their former employers, or from private investments. The value of these varies enormously, ranging from final salary pensions for professionals in well-paid jobs to very small pensions for people with broken work patterns in low paid employment. Typically, women have lower pensions than men, and in all cases private pensions magnify earning differences during a person’s working life. Many people were persuaded to transfer from occupational to private pensions in the early 1990s, in far too many cases to their financial detriment.

Other income may come from part-time earnings, investments, and gifts.

Capital will come from people’s savings and investments (often including a lump sum on retirement) plus the value of any capital assets such as their houses. Older people may sometimes be well off in terms of capital assets, but with only limited income, and there are various schemes to realise part of this capital such as re-mortgaging homes, although the benefit of these needs to be analysed very carefully in individual cases. Capital also becomes an issue if people need to enter residential care: there are currently government proposals to cap care charges in order to limit people’s fears of losing all their capital, but it remains to be seen how effective this will be.

The work of organisations such as Age UK, the Citizens Advice Bureaux. and the increasing involvement of the leadership of the Churches, in offering a critique of policies which make people poor as part of the reform of welfare provision is drawing attention to the real plight of many older people.  ‘Eat or Heat’ is a catchy slogan but it is a very good summary of the daily experience of those on low and fixed incomes.  It is witnessed by Church staff and workers – people who have all sorts of political allegiances but who are united in their commitment to the relief of poverty.

Christians on Ageing will engage with the continuing debate.


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