Yahoo Finance Brits on brink of retirement ‘most pessimistic’ about finances
Baby boomers who are approaching their retirement are more worried about their personal finances than any other age group in Britain, as pension increases come under pressure and rising inflation threatens to erode the value of savings.
One third of 55 to 64-year-olds told accounting giant PwC that they expect their disposable incomes to fall in the next year, compared to 29pc of those aged over 65. That represents a turnaround from the usual picture in which pensioners are the most pessimistic.
“In a trend that started last summer, pre-retirement baby boomers are now the most pessimistic age group,” said Kien Tan at PwC.
“This may reflect their concerns over forthcoming retirement, while over-65s will have benefited most from the ability to withdraw from their pension pot, as well as the triple lock policy of the past few years.”
By contrast 44pc of 18 to 24-year olds expect to be better off, with many younger Britons moving into the world of work. Just 19pc of that group expects to have less disposable income.
Those aged 25 to 34 are also relatively optimistic with 31pc expecting to have more disposable income and 22pc anticipating a fall.
Just 16pc of the 55-64 age group expect their disposable income to rise in the next year, while only 11pc of pensioners think the same – as private incomes are typically fixed after retirement.
Rising inflation is one key worry. The fall in sterling since the Brexit referendum has increased the cost of imported goods, helping push up inflation to 2.7pc on the year in April, its highest level since 2013. Grocery is the only category where more 55-64-year-olds expect to spend more, rather than less, in the coming year, and this is primarily a result of expected price rises.
“In other spending categories, such as going out, big ticket purchases and clothing, at least a quarter of 55-64-year-olds expect to spend less in the coming year, compared with less than 10pc saying they will spend more,” said Mr Tan. “This contrasts with under 25s, more of whom plan to spend more rather than less in categories such as beauty and personal care, clothing and accessories, and health and wellbeing, none of which are priorities for over 55s.”
The pound’s slide has split decisions over holidays – 20pc of 55 to 64-year- olds expect to spend more on holidays, but 23pc are cutting back instead in response to the cost squeeze.
The findings were part of PwC’s latest consumer confidence survey, which found that overall 22pc of Britons expect to be better off next year, compared to 24pc at the start of this year.
