Since Q3 2011, over-55s’ household income has seen a significant rise and typically stands at £1,317 per month, up 21% from £1,091 in 2011 when Britain was in the midst of the economic downturn.
Homeowners increased from 59% in 2011 to 65% in 2014, with those owning a home with a mortgage reducing to 15% compared to 21% in 2011. Those over-55s who do have an outstanding mortgage have reduced their loans over the period by 8%, from an average of £64,214 in 2011 to just £59,057 in 2014.
Over-55s have also benefited from the boom in housing prices, with an 11% increase in the average value of their homes, from £225,503 in 2011 to £249,797 in 2014, most likely boosted by London’s housing market.
Monthly savings have also doubled between 2011 and 2014, with today’s over-55s now typically put away £50 a month, compared to just £24 in the same period in 2011. Their typical total savings and investments have increased by more than £10,000 from £7,969 in Q3 2011 to £18,240 in Q3 2014.
The overall debt held by the over-55s has reduced by 22% between 2011 and 2014, and on average over-55s owe £1,697 in unsecured debt compared to £2,174 in 2011. In particular, credit card debt has fallen by 25% over the period, and personal loans by 39%.
Over-55s’ views on what could pose a threat to their standard of living has also evolved in the past three years, with the rising cost of living becoming less of a worry, and more personal ageing matters such as suffering from a serious illness, losing their partner or having to go into care becoming more of a concern. This could be a consequence of the perceived stability in the economy, with worries shifting from external economic pressures to the potential of larger one-off costs and personal matters.
Clive Bolton, Aviva’s managing director of retirement solutions said:
“There is an enormous difference between life in recession-hit 2011 and the improving conditions of 2014. It’s interesting that as the economy and people’s finances have improved, we’ve seen mounting personal concerns over illness, losing loved ones or going into care.
“Financially, it is clear that Britain’s over-55s have been able to tighten their purse strings when they needed to. And they have also been able to monitor the economic situation and start putting money aside at the right time to get their debt down, reduce or pay off their mortgages, and increase their income.
“This has left them in a much better financial position in 2014 – all within a relatively short period of time. It’s this type of astute financial planning that will be so important in the years to come, as over-55s are given far more freedom in how they use and spend their retirement savings.”
