Finances after 50

Figures from over 50s finance experts SunLife - released just ahead of Pensions Awareness Week (September 14-18) – suggests that more than 7 million over 50s have no private pension and more than 8 million don’t think they have enough money to fund their retirement.

 New figures suggest up to 4.7million women and 3.6 million men over 50 don’t think they have enough money to fund their retirement

In its Finances After 50 study, SunLife found that 28% of over 50s do not have a private or company pension. The number of people over 50 in the UK is now more than 25million, according to the ONS*, which indicates that around 7 million over 50s across the UK have no private pension savings.

 SunLife’s research shows that women over 50 are less likely to have a private pension than men of the same age – more than a third of women surveyed said they didn’t have a private pension (35%) – which across the UK is around 4.6million. Of the men surveyed, one in five said they didn’t (20%), which is equivalent to around 2.4million men across the UK.

The study also found that a third of over 50s - which equates to 8.3million - say they don’t think they have enough money to provide them with sufficient income for their retirement with women are more worried about not having enough money in later life than men.

 Just 13% of women over 50 say they are confident they will have enough money for a retirement income; 36% don’t think they will have enough, which across the UK is around 4.7million women. In contrast, 22% of men over 50 say they are confident they have enough and 30% (equivalent to around 3.6million) say they don’t.

  Many over 50s say they will look to other income sources other than pensions for retirement income; 27% say they are hoping their partner or spouses’ pension will fund their retirement, rising to 30% of women, 12% say they are going to continue to work to provide an income, while 11% are expecting an inheritance to cover it, which suggests 2.7 million people over 50 are relying on being left money to fund their retirement.

 The research shows that many of those nearing retirement have concerns that they are not ready.

There is a huge amount of wealth tied up in properties – particularly amongst older homeowners who have seen huge increases in the value of their properties over the years. SunLife’s research shows that on average, homeowners over 50 have seen their homes increase in value by £127,316 over the past 20 years.

What are the pleasures of old age?

 Elton John once said: “If you let things happen, that's a magical life.”

I think for myself, my siblings, my family, and friends we have had a magical life. Now I cannot speak for sure about my siblings and friends but I believe that they have had magical lives. Some of my friends were planners and made plans, stuck to them, and achieved their goals. I never did. For the most part, I let life happen and just followed my nose from one day to the next, one month and one year to the next. When the universe presented me with a great project or an idea, and I took it on, I did then plan and focus on the goals I needed to complete the project or bring the idea alive. When it was done, I never knew what was around the corner, but I was always ready to embrace it if it was fun and challenging. What about you?

I know I am lucky because as I age, I do not have too many serious diseases, I have a retirement income which I saved for but I know people who do not. I also know people that have serious diseases and they are reduced to a daily life that is made up of the essentials: rest, meals, medications with the remaining time devoted to one's individual kinds of pleasures of old age. I was captured by the phrase the individual pleasures of old age. What are they for others?

For me it is meeting with my friends, talking to my brother on the phone, helping my wife when I can, spending all the time I want online writing. Enjoying a homemade cookie or dessert. Going to bed and waking up without an alarm clock.

What are your pleasures of old age?

Music has the power to enchant

 Many of us love music but like me cannot carry a tune to save their lives. As I am typing this blog, I am listening to The Hits of ABBA performed by the Royal Philharmonic Orchestra. I have great admiration for those who can play and sing and who enjoy music “Music has the power to enchant even the roughest of people. This proverb comes from the play The Mourning Bride, by William Congreve and in our culture is known as “Music has the power to soothe the savage beast.” But music can do more than that. a new report from the Global Council on Brain Health (GCBH) concludes that music can potentially stimulate brain health, manage stress, and help treat brain health conditions as varied as dementia, stroke, and Parkinson’s disease. Here are some takeaways from their research.

1. Music is a powerful way to stimulate your brain.

2. Music impacts different regions of the brain including those involved in hearing/listening, movement, attention, language, emotion, memory, and thinking skills.

3. Music engages multiple parts of the brain and helps them work together.

4. Music can help people recall meaningful memories and emotions.

5. Music is important to promote mental well-being.

6. Any style or type of music can be beneficial for the brain. It is important to consider a person’s musical preferences to maximize music’s potential to promote mental well-being for that person.

7. Playing music, singing, or dancing together is a good way to increase social connections with other people and reduce loneliness, which is good for brain health.

8. Music and dance are linked. Music motivates movement. Dance and other forms of physical activity are good for brain health.

9. Learning to sing a new song, learning to play an instrument, or learning to dance stimulates people’s thinking skills

10. Music allows us to change our emotional state and can often improve mood.

11. Listening to music can help you manage stress.

12. Music can have positive effects on the body and mind, including helping to regulate blood pressure and heart rate.

13. Sleep is important for brain health, and music has been shown to help improve the quality and length of sleep.

Music as Treatment for Diseases or Injuries Causing Cognitive Impairment

1. The ability to dance, sing, and listen to music or play a musical instrument can be preserved in people with dementia, even during later stages of the diseases.

2. Music for persons living with dementia can improve mood and quality of life and can reduce anxiety and depression. There is mixed evidence that music may also reduce agitation. Ongoing therapy with music the person likes is necessary to maintain the benefits.

3. Music provides a way for people with dementia to share positive experiences with others and can be a good way to connect with their caregivers.

4. There is strong evidence that a specialized music-based treatment can improve movement in patients with Parkinson’s disease and stroke, including improvements in walking and talking.

5. There is strong evidence that music helps recovery from stroke. Singing has been shown to help recover the loss of language functions in people due to stroke.

Recommendations for Individuals:

1. Incorporate music in your life. Music may improve well-being including quality of life. Listening to music provides a resource for enjoyment and entertainment, especially when shared with families and loved ones.

2. Dance, sing or move to music. These activities not only provide physical exercise, but they can also relieve stress, build social connections, and are fun ways to stimulate your brain!

3. Enjoy listening to familiar music that comforts you and evokes positive memories and associations.

4. Try listening to new music. While listening to music that you know and like tends to cause the strongest brain response and dopamine release, unfamiliar melodies may stimulate your brain, while providing a new source of pleasure as you get used to hearing them.

5. Listen to music to encourage yourself to exercise. Music can provide a mental boost and help motivate you to move your body. And it can hasten clearance of lactic acid buildup during recovery from vigorous exercise.

6. Don’t delay getting your hearing checked if you notice you are having trouble hearing. Correcting hearing loss as soon as possible is important for maintaining brain health and preserving cognitive function (as well as continuing to enjoy the music!).

7. Make music yourself! Music-making can include both singing and playing an instrument. Learning to play a musical instrument can offer a sense of mastery and self-esteem while enhancing brain activity. Singing may be the simplest way to get started.

8. Try making music with other people. Singing or playing music with and for others can generate positive feedback that enhances self-esteem and provides a satisfying sense of accomplishment. It also can create friendly new bonds with your fellow performers. The benefit of making music with others is not limited to performing music; it also can reduce feelings of isolation.

9. Try joining or forming a music-making group, such as a community choir, band, or orchestra. Making music in groups creates cohesion and a sense of belonging that can promote your mental well-being.

10. If you are unhappy, try listening to or making music to improve your mood or relieve feelings of depression.

Recommendations for Communities:

1. Support or start a community-based music-making group such as a choir. Music-making activities, such as choirs and writing songs as a group, have shown to increase mental well-being for group members.

2. Do not think music-making is limited to formal, in-person organizations. Facilitating connections with one or more people through virtual platforms and social media also can be beneficial.

COVID issues will last a long time

COVID is causing great concern and in Canada, the government issued Canadians impacted an emergency (Canada Emergency Response Benefit CERB)payment of $2,000 a month, The government is also looking very seriously at the concept of a guaranteed annual income and a major shift in how the government deals with low income Canadians. In addition, those who had savings in their Pension Plan, could reduce the amount they had to withdraw from the plan. In Canada, the government imposes a minimum withdrawal rate so that any money in your private pension plan is gone by the time you reach 92.

In Australia, where my daughter lives as many as four in 10 Australians withdrew from their superannuation under the Federal Governments early super access scheme. My daughter and her mate were part of this group. The withdrawal was to help sustain their income, however 40% saw no drop in their income during COVID-19.

Over a quarter (21%) who accessed their super early experienced a pay rise of more than 10% but although my daughter saw a raise, it was not as high as 10%. The scheme, introduced in March, has allowed people experiencing financial hardship because of COVID-19 to withdraw a total of $20,000 tax-free from superannuation ($10,000 in two separate stages).The Australian Taxation Office (ATO) has warned that those misusing the scheme could face fines of up to $12,000 and pay tax on the amount withdrawn.

The analysis of the spending was done by the analytics firm AlphaBeta, part of Accenture, and credit bureau illion and they analysed depersonalised banking data from more than 10,000 Australians who withdrew superannuation during round two of the scheme.

Recipients spent an extra $3,618 in the first fortnight after receiving the lump sum, compared with what their average spending was in a normal fortnight before the early super withdrawal scheme.

On average, Australians withdrew around $7,495 of the $10,000 limit. The analysis found that as with the first round of the early super withdrawal, Australians have used this money to increase their spending rather than maintain it. Almost two-thirds (64%) of this additional spending was on discretionary items such as clothing, furniture, restaurants, and alcohol.

Meanwhile, spending on debt repayments has dropped slightly since the first round of early super withdrawal, from 14% to 12%. More than half the people that withdrew the second amount had no change in income. In fact, almost a quarter had increased their income and continued to withdraw from their retirement savings.

This type of short-term decisions will have a major impact on the retirement incomes of those who withdrew their super over time.

By gender, the average super withdrawal in the second round was $7,240 for women and $7,750 for men. The analysis also found that men and women spent their lump sum in different ways. Women said they spent almost 30% on essential goods and services, while men spent 22% on essentials. Women spent 15% of their super money on debt repayments (this includes buy now pay later debts), while men spent 12%.  To be eligible for early release of super, you must be unemployed, have been made redundant, or had your working hours reduced by at least 20% since January 1.

But the study found that many people who accessed the scheme saw no drop in their income while others even had a pay rise, raising questions about whether those accessing the money really needed it.  This means that people did not see the long-term consequences of their decisions and this may cause issues in a few years when they start to retire and don’t have the income they thought they would.