Welcome to the SunLife Finances After 50 Report 2021
In this report, we look at what people aged over 50 in the UK do with their money, including their spending and saving habits.
We discuss future planning and spending in retirement, and how over 50s are looking to gain extra income in their later years.
The past year has been one unlike any other, so we also wanted to investigate how the pandemic has impacted the over 50s and their finances.
Ready to find out more? Scroll down to explore some key take-outs from the report or download the PDF report.
1. Report background
The research was commissioned in March 2021.
In total, 3,016 online interviews were completed with people over 50 via an online panel.
Our aim was to get an accurate picture of what people aged over 50 in the UK do with their money, including their spending and saving habits.
The data has been weighted to nationally representative profile.
Over 3,000 interviews were completed.
A note regarding the coronavirus
Like all age groups, the impact of coronavirus on the over 50s has been diverse and unprecedented.
It has affected their working lives, their health, their happiness and their finances.
While over 50s face a higher risk of falling seriously ill from coronavirus, they have also been prioritised for vaccinations; at the time of writing more than 93% of people over 50 in the UK had been given their first vaccine jab.
Our research found that 69% of people asked were worried about the effect the pandemic was having on their lives.
Whilst some over 50s’ finances have been negatively affected by the pandemic, the majority have been insulated from the full economic impact of the crisis.
That’s likely to be because only 30% of respondents are in full-time employment or self-employed and instead rely on pensions and investments, so their income remained fairly secure.
Those who were worse off because of the pandemic, lost on average £489 a month.
That’s a significant drop, equivalent to more than a fifth of their average household income.
But those over 50s who are better off because of the coronavirus crisis gained an average £305 a month.
2. Income and outgoings
Spending habits and priorities inevitably change as we get older.
The good news is that, since this research was last conducted in 2019, the average monthly household net income has grown by £128 to £2,303 – only slightly less than the UK average £2,492.
That’s an increase of 5.5% in two years, which compares well with the average 0.8 per cent annual increase seen by UK households over the last decade.
In the same period, average monthly living expenses have also increased, but only by a modest £14, to £1,847.
Over 55s’ disposable income has grown too, up by £52 a month to £589 – that’s enough to cover the average cost of a restaurant meal for two.
And, even though two in five (43%) respondents are retired and living off their pension, around half are still enjoying the same spending habits that they did in their younger years.
3. Saving and investing
People over 50 have added an extra £3,854 to their savings and investments in the last two years and have now built up an average of £54,798.
While four in five (80%) stash their savings in a savings account (80%), around half (53%) use a current account and around the same proportion (52%) have an ISA.
More people are also choosing equity release as a way to access cash for retirement.
But one in ten (10%) still keep their nest egg in cash, with an average £973 hidden away in their home.
But what are they saving for?
|Top five reasons over 50s save|
Three quarters (75%) have a private, personal or company pension, up 3% since the last survey.
When we asked people over 50 if they were happy with the amount of money they had in savings and investments, three quarters (74%) said they were.
Home ownership has grown by 4% to 75% in the last two years, with the average property value up 5% to £252,038.
4. Happiness and wellbeing
Financial security seems to be a big part of what makes over 50s happy.
Compared to 2019’s report, there has been a slight fall in the proportion of people over 50 who consider themselves to be happy, which is down from 63% to 57%.
This likely reflects the challenges and worries caused by the coronavirus crisis.
And just over half (55%) say life has become better since they turned 50.
However, life over 50 does also bring challenges for many.
A third (34%) say they have financial worries for the future, though this is down 7% since the last survey.
Despite the fact that only 28% of respondents live alone, 45% told us that they get lonely.
Ready to retire?
The UK State Pension age is currently 66, but it is set to rise to 67 by 2028.
It’s being kept under review and, as life expectancy increases, it is only likely to get older.
The full State Pension is currently £179.60 a week; around £9,300 a year.
And it seems most of the over 50s in this survey have made their own arrangements to supplement this income.
- Just over one in ten (12%) expect to fund their retirement by continuing to work.
- Only one in five (20%) are confident they definitely have enough in their savings, investment and pension to fund their retirement.
- Two in five (39%) are hopeful they have built up a big enough retirement pot.
- A quarter (25%) don’t have any kind of private pension.
Of those respondents who are already retired, their average retirement age was 60 – five years younger than the current State Pension age.
While four in five (81%) think they got their retirement age about right, 14% say they retired too early and 5% think they stayed in work for too long.
People over 50 have some great advice to pass on to younger people on managing their money and preparing for the future, including their own retirement.
|Top five money tips for younger people|
|Start saving as soon as possible||47%|
|Start a pension as soon as possible||29%|
|Make a budget||7%|
We also asked over 50s what money-saving tips they would share with someone else over 50.
|Top five money tips for over 50s|
|Shop around for deals||10%|
|Only buy what you need||7%|
|Invest in stocks and bonds||6%|
|Make a budget||5%|
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