Life is getting better for UK's over 50s

19 December 2012

 

Quality of Life improved during 2012. However, inflation expectations rising, despite lower inflation this quarter. 124,000 more over 65s in employment compared with a year ago

The latest Saga Quarterly Report shows that in the fourth quarter of 2012, the Saga Quality of Life Index was much higher than at the start of the year, demonstrating that things have been getting better for Britain's over 50s. After the 'Olympic bounce', the Government needs to make sure this 'feel good factor' can be maintained into next year.

A difficult start to the first half of 2012 was followed by a leap in happiness and wellbeing during Britain's golden summer. However, some of these significant improvements in the Quality of Life waned a little in the last quarter. Inflation expectations have risen, and whilst employment of older people has increased, long-term unemployment remains a problem and savings income remains depressed.

The first two quarters of 2012 were extremely challenging for the older generations but this was followed by much better wellbeing measures (a positive 'SMILE' index) in the third quarter.

Inflation pressures

The impact of inflation on older age groups is made clear with the cumulative pensioner inflation rate since Northern Rock failed in 2007 being 27% on the ONS pensioner inflation measures. This is ten percentage points higher than the national average. Although measured inflation fell back towards the Bank of England's 2% target, the squeeze on older people's incomes continued as food and utility price rises have been high - and there are further rises in the pipeline. In fact, inflation expectations among the over 50s have risen this quarter, from 4.6% to 4.8%, which is something that policymakers should be concerned about.

Employment

The resilience of the labour market for over 65s mirrors the national trend; with an increase in employment of 15% (124,000) compared to last year for the over 65s. However, long term unemployment remains an issue for over 50s.

Dr Ros Altmann, Director General of Saga comments:

"The past two quarters findings indicate that things are generally improving. However, as we enter 2013, it is important that policymakers act to prevent inflation squeezing older people's living standards."

Saga's Quarterly Reports measure the Quality of Life for Britain's over 50s by surveying over 10,000 people each quarter to track qualitative areas of their wellbeing, together with measures of their economic wellbeing as reported by official data.

Key findings

  • The Saga Quality of Life Index has declined slightly this quarter though remains higher than in the first half of the year.
  • The SMILE Index of wellbeing was broadly unchanged between Q3 2012 and Q4 2012. The Index rose slightly for men, but declined for women.
  • Real inflation-adjusted incomes of the over 65s showed marginally positive year-on-year growth in Q3 2012, as lower inflation helped prop up spending power among this age group.
  • The over 50s have revised up their inflation expectations this quarter.
  • There were 389,000 unemployed people aged 50-64 over the three months to August 2012 - 1.1% higher than the previous quarter and 6.7% up from a year ago.

 

Source: IFA Life

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