For immediate distribution 7 February 2011
Many happy returns Baby Boomers – tomorrow February 8 2011 is ‘Baby Boomer Day’
A key milestone in post-World War 11 history is rapidly approaching, as the first wave of post-war babies conceived during the VE Day (or Victory in Europe Day) celebrations on May 8, 1945 reach their 65th birthday.
For many UK citizens, that means they can look forward to retirement tomorrow - 8 February 2011.
Now specialist retirement solutions provider Partnership looks at the impact for the UK’s baby boomers on the community and themselves.
Baby Boomers – key highlights of the immediate post-war generation:
• 65 year olds can expect to live another 23 years - until their late 80s - as they are living healthier, longer lives. In 1946 and the first half of 1947, 65 year olds could expect to live for only 13 years. (DWP)
• The number of 65 year olds in Britain will increase by around 150,000 between 2011 and 2012 – those born in the latter half of 1946 and the first half of 1947, corresponding with the post-war spike in births (DWP)
• In 2011 658,000 people will turn 65. Next year it will increase to 806,000. (DWP). This is nearly 100,000 more than the total number of babies born each year in England and Wales (Local Government Association: Future Demographic trends in England, August 2010)
Many will join a golden generation
• People aged over 65 collectively own property worth £765.18 bn on which they do not have a mortgage (Key Retirement Solutions – based on analysis of ONS and Land Registry Data, 2010).
However
• Baby boomers will add an extra £2 billion to the bill for basic state pension (which in 2010 amounted to £56 billion) DWP (Report on Pension Reform)
• There are more people aged over 60 than under 16
• In the oldest 10 councils in the UK for every 2 people of working age there will be 1 person in retirement.*
• Many will face poverty in retirement as the average man and woman retiring in the UK today can look forward to a state pension of under £6,000 per year, plus a private pension of around £2,000 a year. **
Partnership Chief Executive, Steve Groves, said: “We wish the baby boomers a happy 65thbirthday on 8 February.
“They form part of a golden generation, many of whom have been fortunate enough to reap benefits that younger generations will not.
“Many have enjoyed record house price inflation, company pension schemes and free education for themselves and their families.
“They can now look forward to living for nearly twice as long in retirement as the 65 year olds who were celebrating VE Day,” said Groves.
However, he added that this longevity will present many challenges for younger generations.
“With more people aged over 60 than there are under 16, there will be fewer young people to meet the costs of the elderly through direct taxation. In the oldest councils in the UK there will already be 2 people of working age for every 1 in retirement. By 2030 this will increase to 4 people working for every 3 retired in the oldest councils,” he said. *
The Government is working hard to find solutions for this significant shift in demographics by introducing legislation to end the default age for retirement and extending the pensionable age for men and women.
But despite the wealth of those who will turn 65 in 2011, many will face many years in poverty. Research conducted for PICA (by think tank Oxford Economics and the ONS) reveals that 23% of pensioners – or 2.5 million people – now officially live out an impoverished retirement.
The good news is that many pensioners, who are cash poor but asset rich can draw upon nearly £ 1 trillion pounds of un-mortgaged property that they own, through equity release or down-sizing.
Many others can improve their retirement income significantly by shopping around for the best annuity rate at retirement.
“It is a scandal that currently only one in three people do so, despite the fact that many can increase their retirement income by 20% or more if they are among the 40% of people who are eligible for enhancements because of health and lifestyle conditions,” said Steve Groves.
“The scale of the problem is significant and cannot be swept aside. In the last decade Partnership has estimated that UK pensioners have lost up to £ 7bn in retirement income by not shopping around.
This is the same amount as the UK spent last year on the Irish Bailout.*** “People who are entering retirement now should also be writing wills and planning to meet the costs of their long term care. It is estimated that between 1 in 2 and 1 in 3 females aged 65 today will need care during their lifetime – we wish them all a Happy Birthday,” added Groves.
Ends
*Partnership release – Explosion in 85 year olds set to put massive pressure on Long Term Care funding. August 17, 2010. Based on an interrogation of “Ageing in the UK”, Office of National Statistics. http://www.statistics.gov.uk/ageinginthe uk/default.htm **Partnership release – Partnership reveal extent of savings and annuity black hole as millions will have to live on less than £10k per year. 9 June 2010. Partnership data. ***Partnership release. 7 December 2010. Partnership research based on PICA/Oxford Economics research PICA/Oxford Economics.