What’s the cost of living impact on seniors?

This article will update you on:

• The current cost of living crisis.

• How does the current financial climate affect older people?

• Advice and support touchpoints for seniors.

What is the Cost of Living Crisis?

The cost of living crisis is a phrase that we’re all becoming more used to hearing on a regular basis. However, we might not be fully aware of what has created this difficult set of circumstances or how older people are coping with it all.

According to the Institute for Government, the cost of living crunch has occurred due to a fall in actual disposable incomes (what is left in your pocket after tax, national insurance and other expected adjustments) since 2021.

Another key factor in the current climate is the sudden rise in inflation, which refers to the average change in the price of UK goods and services over the last 12 months. Inflation is tracked using the CPI (Consumer Price Index) which is now calculated to be at 9%.

The latest data from the Bank of England is predicting inflation to reach around 10% by the end of 2022, with an expectation it will remain quite high until 2024.

In addition, the Yorkshire Building Society has recently published a report into the cost of living, finding that average weekly household spending is predicted to be £705 by 2024, rising from around £595 in 2021.

Spending on housing and utilities was in 4th place for average weekly spend for most people in 2002; whereas by 2024, it is forecast to be 2nd in people’s essential weekly spending, mainly due to the rise in energy prices.

The ONS (Office of National Statistics) has reported that 9 in 10 adults have said there has been a noticeable rise in their cost of living in the months leading to March 2022.

To explain in a little more detail, this clip from The Independent explores what is happening to the cost of living in the UK.

One major factor contributing to the cost of living is the rise in energy prices. Gas prices have increased due to a rise in demand from Asia and supply issues in Europe. The Russian invasion of Ukraine has severely affected both the supply and cost of gas and electricity in Europe and in the UK.

Global supply chain issues have also played a part in rising costs across the board, from food supplies to energy, plus a whole range of products and services.

With all this in the background, wages haven’t increased in line with rising costs or inflation, so there are less pounds and pennies in our pockets as a result. People, particularly older people, have seen savings being hit by lower percentage rates over the last decade.

How is the Cost of Living Crisis affecting seniors?

It’s true to say that many over-65s are reliant on pensions that do not necessarily rise in line with inflation and price increases. As such, a large proportion of older people are being hit particularly badly with the effects of the cost of living crisis.

The Pension Policy Institute reports that the cost of living is increasing more quickly for pensioners than their income, with rises in housing and energy significantly impacting this group.

The data from the Pension Policy Institute, shown in the image below, reveals that pensioners spend a growing portion of their income on housing, bills and food as they become older and less on transport or leisure activities.

It could be suggested from these figures that those aged 75+ will be hit quite hard by rising food and energy bills.

For many, the current financial climate will create real hardships, as revealed in this Sky News video.

These real-life issues were debated in the House of Commons on Monday 31st March 2022, with the transcript published in Hansard.
Here, Johnathan Ashworth, MP, describes the alarming statistics relating to older people facing increases across the board,

“Let us look at the facts: 2 million pensioners in poverty and the number rising; one in five people of pension age now living in poverty; and 1.4 million older people in England in fuel poverty.”

In May 2022, The Guardian reported on the financial pressures building on older people, with seniors reporting that they avoided putting the oven on to cook or were dreading winter coming as that would mean putting the heating on.

This article explores how ordinary people, who worked in commonly-held jobs, such as teaching, social work, health and sales, are facing tough decisions about how they apportion available money.

For some, there is so little left over once bills are paid, they cannot afford food to cover the whole month. One pensioner, Ken Taylor, a 72 year old retired salesperson, describes how, even with incredibly tight budgeting, there are fewer pounds to spend on the one essential we all need: food.

‘His monthly income from a state pension and a small work pension is £1,188, and his outgoings for essentials are £1,096, leaving £92 for any additional expenses. “It will not be long before I do not have enough to last the month,” he says.’

Charities concerned with the plight and support of older people are continuing to state how the changes in our social fabric, alongside the upsurge in living costs, are affecting seniors.

Age UK reports that:

Among those aged 70+ who reported an increase in their cost of living, the most common reasons given were rises in the price of food shopping (96%), gas or electricity bills (80%) and in the price of fuel (81%). In response to this, over-70s are:

• spending less on non-essentials (51%)
• cutting back on non-essential journeys in their vehicle (47%)
• using less energy at home (45%)
• shopping around (40%)
• spending less on food shopping and essentials (26%)
  
• using savings (21%)

To try and gauge how older people feel and what they are facing on a daily basis, Age UK has launched the ‘It doesn’t add up’ campaign, urging seniors to fill out a short survey to show how the cost of living increases are affecting them.  

Examining the feelings of older people in graphic detail, this STV news video highlights the issues facing retirees in Scotland and how they are struggling with stretched financial capabilities.

To present balance, it’s important to include the government’s response to the cost of living crisis. Rishi Sunak has outlined strategies which are being put in place to support those struggling with the payment of bills.

In a government factsheet, published on 26th May 2022, the upcoming payments are explained. There is some extra financial support for older people, with a one-off £300 payment being promised to pensioner households who already receive the Winter Fuel Payment.

Advice and support touchpoints for seniors

The question often is, “Where can I get some help or advice?” It can be tricky to know where to start, particularly if you’re on your own. That’s why it’s vital to research all your options thoroughly and make sure you have all the facts before you make any financial decisions.

To help with advice around benefits, living costs and entitlements, Age UK has a helpline for those who need support.

Citizens Advice can also offer supportive resources and relevant information for the over-65s looking for assistance.

In addition, Schroders can provide practical advice and a financial health check for those looking for guidance and help with future planning.

If you’re looking for information around what potential benefits you could be entitled to, the NHS website has a clear summary of each and the requirements you would need to fulfil.

You might be on a low income and need extra support to top up your pension. If this is the case, you can visit the pension credit page on the Gov.uk website to see if you’re eligible for pension credit. This is an extra benefit for those who are over state pension age but don’t have enough to cover basic needs.

Where can I find information about later life care?

Growing numbers of people are turning to Autumna for support and information when they want to find out more about their care home, home care, live-in care and retirement community options.

Starting an internet search without really knowing what to look for can be tricky but Autumna can ease the stress and really help people find what they are looking for.

Why not start by completing this short form to let us know exactly what your later life needs are? We’ll then use our database of over 26,000 care providers to filter your search and send you a shortlist of those that can help.

Alternatively email us here: info@autumna.co.uk or call our Advice Line on 01892 335 330. Our phone line is open seven days a week. (8:30am - 5:30pm Mon-Fri, 10am - 5pm Sat, 10am - 4pm Sun).