In the fourth quarter of 2012, the Saga Quality of Life Index remains much higher than at the start of the year, demonstrating that things may be slowly getting better for Britain’s over 50s.
A difficult start to the first half of 2012 was followed by a leap in happiness and wellbeing during Britain’s golden summer, however, some of these significant improvements in the Quality of Life have declined slightly in the last quarter, since the ‘Olympic bounce’ as inflation expectations have risen again, long-term unemployment remains high and savings income remains depressed. Nevertheless, the Saga Quality of Life index remains higher than at the start of the year when high levels of inflation were causing a significant squeeze on older people's living standards.
The first two quarters of 2012 were extremely challenging for the older generations but this was followed by much better wellbeing measures (a positive 'SMILE' index) in the third quarter, where over 50s were less negative about their living standards, happiness and health across all age groups. The SMILE index has slightly fallen but not by much this quarter and we hope that policymakers will act to avoid a complete reversal of the summer 'feel good' factor.
The devastating impact of inflation on older age groups is made clear with the cumulative pensioner inflation rate since Northern Rock failed in 2007 being 27% on the ONS pensioner inflation measures. This is ten percentage points higher than the national average. Although measured inflation fell back towards the Ban k of England's 2% target, the squeeze on older people's incomes continued as food and utility price rises have been high - and there are further rises in the pipeline. In fact, inflation expectations among the over 50s have risen this quarter, from 4.6% to 4.8%, which is something that policymakers should be concerned about.
Whilst the resilience of the labour market for over 65s mirrors the national trend; with an increase in employment of 15% (124,000) compared to last year for the over 65s. However, long term unemployment remains an issue for over 50s.
Dr Ros Altmann, Director General of Saga comments:
“2012 has been a tough year for older generations; however we hope the past two quarters findings indicate that things are getting better for Britain’s over 50s.
“As we enter 2013, it is important that policymakers act to prevent inflation continuing to squeeze older people's living standards. Utility prices are likely to become a major issue and recognition of the tough times savers have faced would be most welcome.”
Saga’s Quarterly Reports measure the Quality of Life for Britain’s over 50s by surveying over 10,000 people each quarter to track qualitative areas of their wellbeing, together with measures of their economic wellbeing as reported by official data.
• The Saga Quality of Life Index has declined slightly this quarter though remains higher than in the first half of the year.
• The index remains firmly in negative territory, meaning that quality of life is worse than a year ago.
• Only those in the most affluent (AB) socio-economic group reported to be happier than last year.
• The SMILE Index of wellbeing was broadly unchanged between Q3 2012 and Q4 2012. The Index rose slightly for men, but declined for women.
• Real inflation-adjusted incomes of the over 65s showed marginally positive year-on-year growth in Q3 2012, as lower inflation helped prop up spending power among this age group.
• The over 50s have revised up their inflation expectations this quarter.
• There were 389,000 unemployed people aged 50-64 over the three months to August 2012 – 1.1% higher than the previous quarter and 6.7% up from a year ago.
• Money-related worries continued to be more predominant for the over 50s.
• A significant proportion of over 50s continued to economise through cutting back discretionary – and even in some cases essential - expenditure