Virus fears slump will hit over-50s
AS CORONAVIRUS fears grow, the over-50s look particularly vulnerable to an economic downturn as they are already going insolvent at a faster rate than the rest of the population.
Those over 65 are hardest pressed, with insolvencies up 43 per cent in just 10 years, against just 14 per cent for the population as a whole, according to new figures from over-50s jobs site RestLess.co.uk.
The numbers of over-65s taking out an individual voluntary arrangement (IVA), an alternative to bankruptcy, jumped 242 per cent over the period, rising to 312 per cent for women, who often have lower pension income.
Rest Less founder Stuart Lewis said total insolvencies are now the highest since the financial crisis, with rates rising fastest among older people: “When people think of the ‘boomer’ generation, they see images of silver hair retiring on sunset beaches, but the reality is often different.”
Lewis said older workers are more likely to face redundancy and longterm unemployment, and receive less workplace training: “This leaves many in significant financial vulnerability.”
The value of their pension savings and Isa investments have plunged during the coronavirus crash, while savings rates could fall further if the Bank of England cuts interest rates.
The crashing oil price may ease the pressure, with AA spokesman Luke Bosdet predicting unleaded could fall below 110p a litre for the first time since August 2016. “It depends how long the price plunge continues and how quickly it’s passed on,” he said.
Falling energy prices will also help three million elderly people forced to ration their gas and electricity usage.
Figures from CompareTheMarket. com show that the over-65s pay over the odds for energy, forcing one in four to cut down on basics.
Head of energy Peter Earl said the elderly are less likely to switch despite average savings of £286 a year, leaving many on uncompetitive standard variable tariffs. “Look for a better deal now,” he added.
Andrew Morris, over-55s specialist adviser at Age Partnership, said people should work through fixed outgoings such as direct debits, to see where they can cut back or get a better deal.
“Switching credit card debt to zerointerest balance transfer cards could help, or switch a mortgage or personal loan to a cheaper deal, but beware early repayment penalties,” he said.
“Make sure you claim all the state benefits you are entitled to, such as pension benefit, attendance allowance and council tax deduction.”
Check if you qualify for local authority grants available for home improvements such as a new boiler, or to help with later-life mobility.
Other options include taking in a lodger, getting help from family or friends, or for homeowners, unlocking capital through equity release.