Aldermore bank’s latest Savings Tracker1 reveals that one in four (26%) over 55s are worried about their financial future in a climate of rising living costs and expensive later life expenses. The research shows many adults have not taken steps to review their savings to ensure they are financially prepared for later life costs, many of which a pension may not cover.
There are a wide range of additional later life costs that people should factor in when looking at their longer term finances, and yet a huge savings gap exists. Only 19% of over 55s feel they have saved enough towards their long term care with the average amount saved just £1,603. With the average cost of residential care in the UK costing £667 a week2, the current savings trajectory is far from adequate.
Meanwhile, only one in three (34%) feel they have saved enough to enable them to adapt their home for later life should the need arise. Whilst small adaptations costing less than £1,000 should be paid for by the council, the PSSRU (Personal Social Services Research Unit) has calculated that the costs of some adaptations can escalate up to an average of £16,6474.
Even the average cost of a funeral, cited to be £4,0563 far exceeds the current average amount ear-marked.
Many are also saving towards financially assisting their children to help them achieve their life goals, such as further education and buying a home, but this can come at a significant cost. The average amount saved by people towards supporting their children is £1,134, but costs of university are currently averaging up to £9,250 per year5 and the average UK house deposit6 totals £32,841.
| Later Life priority | Average saved | % think they have saved enough |
| Funeral costs | £1,292 | 52% |
| Serious illness | £1,340 | 28% |
| Long term care costs | £1,461 | 18% |
| Adapting home for later life | £955 | 31% |
| Supporting children e.g. further education, getting on the housing ladder | £1,134 | 26% |
The survey reveals the consistent issue to be that on average, UK adults generally lack knowledge as to what their financial situation will look like later in life, with two in five (38%) not knowing what the value of their pension savings are. Of those who do know, the average amount accumulated by over 55s is £58,215, whilst the average pension savings amongst all UK adults is just £39,688. A quarter (25%) of UK adults admit they have just £20,000 or less in pension savings.
Ewan Edwards, director of savings, Aldermore said: “Our research highlights the high costs and worrying lack of retirement funding amongst the UK’s seven million strong population of over 55s that have not reached retirement age yet. Retirement can feel far away for many but early planning can reap big rewards when it does come.
“Later life costs can be steep, and often unexpected, so starting early towards building savings pots beyond a pension will help lower the financial impact of these expenses. With inflationary pressures now thrown into the mix, it’s crucial that people assess costs next to their retirement funds and use a range of saving and investment vehicles to nurture good later life financial health.”
**Ends**
1 Research conducted, on behalf of Aldermore bank, by Opinium between 9 -14 December 2021, with a sample size of 4,000 UK adults ages +18.
2 Source: LaingBuisson: Care of Older People UK Market Report 31st edition 2020
3 Source: Sunlife: Cost of Dying report 2022
4 Source: Personal Social Services Research Unit: Costs of Health and Social Care
5 How Much Does it Cost to Study in the UK? | Top Universities
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