Our customers

55-64s most likely to feel ‘up to their neck in debt’ as financial squeeze bites

Senior women working on laptop at home
  • More than two in five 55-64 year olds admit they are ‘struggling financially’ or are ‘up to their neck in debt’
  • 75% [i] of those struggling financially say they are attempting to boost or stretch their income further
  • From an age perspective, inflation continues to hit older people hardest
  • Most need to increase their income by an average of £257 a month to feel more comfortable financially
  • Over half  (55%) ‘shop around for best deals’ in bid to make their money go further, 28% have cancelled unused subscriptions

According to new research from savings and pension provider, Aviva, more than two in five (43%) of 55-64 year olds surveyed admit they are ‘struggling financially’ or are ‘up to their neck in debt’ against an average of 35% of people surveyed in the 55+ age group.

Encouragingly, three quarters (75%) of those who say they are struggling financially are taking measures to improve their financial situation by trying to boost their income, or making their money go further by stretching how they spend their hard-earned cash.

Almost a quarter (24%) say they ‘sell unwanted and unneeded items in places like car boot sales or online marketplaces’. Whereas one in five (19%) get paid to test products and do market research.  One in twelve (8%) say they have had to delay their retirement or continued to work past retirement age in order to make ends meet.

Other actions commonly being taken by the 55s and over to help boost income levels include:

Actions taken to boost income:

Average (Aged 55+)

Move outstanding debts to 0% balance transfer card

6.5%

Get paid for switching bank account

5.0%

Sell homemade items (e.g. jewellery, cards, candles, confectionery)

4.7%

Take on casual jobs (e.g. housesitting, pet sitting, gardening, cleaning)

4.5%

Return to work (if previously retired)

3.6%

Find lost money (lost bank account, savings, pensions, premium bonds)

2.8%

Rent out property, spare room, vehicle, parking space etc.

1.6%

Alistair McQueen, Head of Savings and Retirement at Aviva says, Unfortunately the headline inflation figure – 10.1% in July 2022 - is just an average. Our personal inflation will heavily depend on our own spending patterns.  If, for example, you spend more on goods experiencing higher inflation (i.e. food, energy, fuel),  your personal inflationary experience may be well above this headline rate. What’s more, The Bank of England currently forecast inflation to hit around 13% in Q4 2022 – but this may increase further as a result of higher than expected figures in July. It’s a worrying picture but  it’s encouraging to hear that people are taking matters into their own hands to enhance and protect the money they have.”

Aviva uses official ONS data each month to estimate how inflation differs by age group. The latest analysis (17th Aug) shows that, from an age perspective, inflation continues to hit older people harder, on average.  This means that those over the age of 55 today are experiencing above average levels of inflation (above 10.1%). This is being primarily driven by older households spending a greater proportion of their (typically smaller) budgets on food and domestic energy. Both of which are experiencing inflation above the headline rate, at 12.8% and 70.3% respectively - figures that are not expected to fall again any time soon, as global energy prices rise. 

Breaking news: Impact of October energy price cap rise on inflation by age

Ofgem announced on Friday, 26th August that the energy price cap will rise by 80% in October 2022. Aviva estimates that this could carry the headline CPI inflation rate to c15% in October, assuming all other goods maintain their recent inflationary trends. This is expected to hit older households hardest and could be as high as 18.8% for the over 75s.

McQueen continues, “Despite the support of the rising state pension, inflation is bringing pressures to the incomes of those both approaching, and already in, retirement. Those aged 55-64 years old, who are often considered to be the ‘sandwich generation’ as they support their elderly parents and their grown up children, are also the ones who tell us they are struggling most, financially. Unfortunately, no one can completely shelter from the impacts of rising inflation at the moment, but those taking steps to boost and stretch their income can help make their money work as hard as possible for them.”

As well as attempting to boost incomes,  top of the list of steps the over 55s are taking to make their cash go further is to ‘always shop around for best deals’  (55%). This is closely followed by almost half (46%) using loyalty schemes and  bonus programmes to save points or to find offers, discounts, vouchers and other money saving perks (e.g. supermarket loyalty cards).  More than a third (35%) shop for ‘yellow sticker’ (reduced) food on a regular basis, and more than one in four (28%) have cancelled unused or underused subscriptions.

Other steps people take to make their money go further:

Aged 55+ (average)

Walk or cycle instead of using car or public transport

28%

Buy in bulk when items are on offer

27%

Repair/renovate/refurbish/upcycle instead of buying new

26%

Shop non-essential items on sales

24%

Hunt for free coupons, vouchers, and discounts

20%

Regularly use switching service to reduce bills

17%

Use free cashback apps

17%

Use garden/balcony/ allotment to grow fruit and veg

14%

Regularly switch current /savings accounts to better interest rates

10%

On average, respondents will need to increase their income by £257 a month to feel more comfortable financially. This figure rises to £310 a month amongst the 55-64 year olds.

Almost 9 out of 10 (89%) of those who said they are taking measures to boost their income or make their money go further agree that putting these extra measures in place will have a slight or significant positive impact on their retirement.

Four other simple steps people can take include:

  1. Shop around, when saving: In addition to shopping around when spending, it’s also important to consider shopping around when saving. As inflation is rising, savings interest rates are also rising too. Small increases in savings interest rates could help make your money go further.
  2. Get free help: There is a lot of free support to help people manage their money. A primary source of help is the government’s MoneyHelper site. For those who are considering their pension options at retirement, the government-backed “Pension Wise” available through Moneyhelper, can provide free guidance. 
  3.  Professional help: If you are interested in seeking professional financial advice, the government’s Money Helper website maintains a register of advisers
  4. Download Aviva’s Mid Life MOT app. It’s free of charge and can help to provide you with a free check-up on your work, wealth and wellbeing.

-ENDS-

Sources

[i] Refers to respondents who said 'I'm struggling financially’ or ‘I'm up to my neck in debt’ when asked: Which of the following best describes your financial situation?

Contains public sector information licensed under the Open Government Licence 3.0.

Methodology:

The research was conducted by Censuswide between 22.07.2022 – 27.07.2022, from 1,003  general consumers aged 55+.

Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.  

Media Enquiries

Fiona Whytock

Retirement, Savings and Investments

Notes to editors:

  • We are the UK’s leading Insurance, Wealth & Retirement business and we operate in the UK, Ireland and Canada. We also have international investments in Singapore, China and India.
  • We help our 18.5 million customers make the most out of life, plan for the future, and have the confidence that if things go wrong we’ll be there to put it right.
  • We have been taking care of people for 325 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2021, we paid £30.2 billion in claims and benefits to our customers. 
  • Aviva is a market leader in sustainability. In 2021, we announced our plan to become a Net Zero carbon emissions company by 2040, the first major insurance company in the world to do so. This plan means Net Zero carbon emissions from our investments by 2040; setting out a clear pathway to get there with a cut of 25% in the carbon intensity of our investments by 2025 and of 60% by 2030; and Net Zero carbon emissions from our own operations and supply chain by 2030. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition at www.aviva.com/sustainability.
  • Aviva is a Living Wage and Living Hours employer and provides market-leading benefits for our people, including flexible working, paid carers leave and equal parental leave. Find out more at https://www.aviva.com/about-us/our-people/
  • As at 30 June 2022, total Group assets under management at Aviva Group are £353 billion and our Solvency II shareholder capital surplus is £10.3 billion. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
  • For more details on what we do, our business and how we help our customers, visit www.aviva.com/about-us
  • The Aviva newsroom at www.aviva.com/newsroom includes links to our spokespeople images, podcasts, research reports and our news release archive. Sign up to get the latest news from Aviva by email. 
  • You can follow us on:
  • For the latest corporate films from around our business, subscribe to our YouTube channel: www.youtube.com/user/aviva

      More from our Newsroom