Over 60s face being ill, lonely and skint

%VIRTUAL-SkimlinksPromo%old couple with zimmer framesGetting old means being ill, lonely and skint if latest research is to be believed.

Research from LV= found that within the first five years of retirement, almost a third of retirees (31%) said their health had worsened, and 10% had been diagnosed with a serious illness. The Office of National Statistics said the divorce rate for over 60s was on the rise.

Old, free and single

LV's finding outside of health issues, included that more a quarter of retirees (26%) gave financial help to family members, one in five (19%) moved house and a quarter (24%) carried out significant work to their existing property. This was all within the first five years.

Meanwhile Prudential analysed the ONS data and said that between 1991 and 2011, the number of divorces amongst men aged 60 plus increased by 73% and the corresponding figure for women is 82%. In that period the overall divorce rate fell by 26%.

Vanessa Owen, LV= head of annuities said: "People often associate retirement with relaxing and taking things easy, however, it is also a time when some major step changes can happen in life. It is important that people build in some flexibility to their finances, so they have the option to adapt to their changing needs as they settle into retirement.

"The majority of people still currently fix themselves into an annuity for life at the point of retirement, which may limit their options in the face of life changes."

Divorced and broke

According to Prudential's Class of 2013 study, the average expected income for those retiring this year is already at a six-year low, however divorce reduces this by a further 16 per cent.

As a result, people retiring this year who have been through a divorce expect an average annual income of £13,800, compared with £16,400 for those who have not been through a marriage breakdown.

Those who have been divorced are also more likely to enter retirement with outstanding debts and less likely to have private pension savings.

Clare Moffat, pensions specialist at Prudential, said: "Divorce can be emotionally draining but also financially draining as the retirement income gap for divorcees demonstrates. Whether it is due to the financial implications of splitting existing pensions, the cost of setting up a new home or legal fees, divorce clearly has a major impact on the retirement plans of many people.

Seven retirement nightmares
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Over 60s face being ill, lonely and skint
Figures from charity Age UK show that 29% of those over 60 feel uncertain or negative about their current financial situation - with millions facing poverty and hardship. Even though saving for retirement is not much fun, the message is therefore that having to rely on dwindling state benefits in retirement is even less so. To avoid ending up in this situation, adviser Hargreaves Lansdown recommends saving a proportion of your salary equal to half your age at the time of starting a pension. In other words, if you are 30 when you start a pension, you should put in 15% throughout your working life. If you start at 24, saving 12% of your salary a year should produce a similar return.
Many older couples rely on the pension income of one person - often the man. Should that person die first, the other person can therefore be left in a difficult position financially.
One way to prevent financial hardship for the surviving person is to take out a joint life annuity that will continue to pay out up to 67% of the original payments to the surviving partner should one of them die.

The disadvantage of this approach, however, is that the rate you receive will be lower. Again, the Pensions Advisory Service on 0845 601 2923 is a useful first port of call if you are unsure what to do.

Around 427,000 households in the over-70 age groups are either three months behind with a debt repayment or subject to some form of debt action such as insolvency, according to the Consumer Credit Counselling Service (CCCS).

Its figures also show that those aged 60 or older who came to the CCCS for help last year owed an average of £22,330. Whether you are retired or not, the best way to tackle debt problems is head on.

Free counselling services from the likes of CCCS and Citizens Advice can help with budgeting and dealing with creditors.

Importantly, they can also conduct a welfare benefits check to make sure you are receiving the pension credit, housing and council tax benefits, attendance and disability living allowances you are entitled to.


The average UK pensioner household faces a £111,400 tax bill in retirement as increasing longevity means pensioners are living on average up to 19 years past the age of 65, according to figures from MetLife. And every year in retirement adds an extra £5,864 in direct and indirect taxes based on current tax rates to the costs for the average pensioner household. You can be forced to go bankrupt if you fail to pay your taxes, so it is vital to factor these costs into your retirement planning.It is also important to check that you are receiving all the benefits and tax breaks you are entitled to if you want to make the most of your retirement cash.

The cost of a room in a care home in many parts of the country is now over £30,000 a year, according to figures from Prestige Nursing and Care. So even if the prime minister announces a cap on care costs - last year the economist Andrew Dilnot called for a new system of funding which would mean that no one would pay more than £35,000 for lifetime care - families will still face huge accommodation costs. Ways to cut this cost include opting for home care rather than a care home. Jonathan Bruce, managing director of Prestige Nursing and Care, said: "For older people who may need care in the shorter term, home care is an option which allows people to maintain their independence for longer while living in their own home and should be included in the cap." However, the only other answer is to save more while you can.
Older Britons are often targeted by unscrupulous criminals - especially if they have a bit of money put away. For example, many over 50s were victims of the so-called courier scam that tricked into keying their pin numbers into their phones and handing their cards to "couriers" who visited their homes. It parted consumers from £1.5 million in under two years. Detective Chief Inspector Paul Barnard, head of the bank sponsored dedicated cheque and plastic crime unit (DCPCU), said: "Many of us feel confident that we can spot fraudsters, but this type of crime can be sophisticated and could happen to anyone." The same is true of boiler room scams that target wealthier Britons with money to invest, offering "once-in-a-lifetime" opportunities to snap up shares at bargain prices. Tactics to watch out for include cold calling, putting you under pressure to pay up or lose the opportunity for good, and claiming to have insider information that they are prepared to share with you.
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