Quality of life crashes again for Britain's over-50s as inflation damages living standardsTuesday 17 May 2011
Quality of life crashes again for Britain's over-50s as inflation damages living standards
Saga's latest report reveals the gap between the rich and poor has widened since January.
Quality of life for people over 50 has declined in the past three months according to the latest Saga Quarterly Report*, the second comprehensive quarterly analysis from Saga investigating the lives of Britain's 21 million over 50s.
The Saga Q2 Report, published today, reveals a decline in quality of life as a result of the notable drop in living standards, with people in their 50s the worst affected. The Report shows the over 50s are considerably cutting back on their discretionary spending, with nearly half of those surveyed saying they eat out less (41%), use the car less (40%) and buy less takeaway meals (47%) than a year ago. People are treating themselves far less than they used to with more than a third (38%) spending less on clothes and more than a quarter (28%) cutting back on beauty products and hairdressing.
Double pressures of high inflation and low interest rates have led to the notable erosion of spending power among the age group. The report shows how the over 50s are increasingly worried about the cost of living with over half (56%) listing it as their number one concern this quarter, well above their health (27%), their family’s health (21%) or levels of crime (17%).
While living standards are notably worse this quarter, resilience amongst the over 50s is demonstrated by the fact that, despite financial hardships, their happiness has not worsened in the past three months.
Commenting on the findings, Dr Ros Altmann, Director General, Saga said: “Financial burdens for the over 50s have worsened in the past three months with living costs soaring. We are witnessing a significant decline in discretionary spending. This has worrying implications for the whole economy and could mean less consumer demand and less job creation for the young.
“Despite these hardships, the over 50s are trying to remain positive and stoical as proved by the stability in their overall happiness since January.”
The only group which has seen a small improvement in overall quality of life are those in their late 60s. This may be partly a result of more over 65s now staying on in work and receiving additional income.
The Q2 report highlights that the gap in quality of life between the highest and lowest socio-economic groups has widened since last quarter's Report, with the fall in standard of living, health and happiness being significantly worse for lowest socio-economic groups. The 'DEs' are struggling twice as much financially as those in the 'AB' group and are also feeling less healthy and happy than their counterparts in higher economic groups. There is also an age-group divide, with those in their fifties suffering more than people in their sixties.
Dr Ros Altmann continues: “It is often assumed that older people have fewer problems than the younger ones, yet our report highlights a continued struggle, especially for those in their 50s and those from lower socio-economic groups that have witnessed another rapid decline in their standard of living since January.
“With standards of living continuing to fall, it is essential that the Government take serious note of the quality of life for this important and growing generation, as their financial struggles will impact on the country as a whole and weaken economic growth in coming quarters.”
Key findings of the Saga Q2 Report
· The Saga Quality of Life Index deteriorated between the first and second quarters of 2011 – indicative of the significant financial squeeze on households so far this year
· The over 50s have cut their discretionary spending, with four in ten reducing spending on eating out and entertainment and also using their cars less
· Inflation is particularly high for those aged 50-64, given that they spend proportionately more on transport than the UK population as a whole.
· There was an increase in inequality between better off over 50s and the rest of the older population. Quality of life deteriorated more sharply, the lower the socioeconomic group,
· Deterioration in quality of life is most pronounced among those in their 50s, especially with respect to their standard of living
· More over-50s report the rising cost of living (56%), savings income (46%) and interest rates (40%) as a greater concern than a year ago
· Long-term unemployment among the over-50s remains an issue, and a higher proportion of unemployed 50-64 year olds have been out of work for over 12 months, compared with the entire population aged 16 and over.
· Employment among the over-65s has risen by 35% over the last three years – with more over-65s staying in work, partly for economic reasons but also because they enjoy working.
· 63% of the over 50s want the Bank of England to increase interest rates
*The Saga Quarterly Report
The Saga Quarterly Report is the first research series which combines hard economic data with survey evidence on well-being, echoing the Government's initiative to measure national well-being. The Report Series is undertaken by respected independent economists at the Centre for Economics and Business Research (Cebr) and is updated every three months.
The Saga Quarterly Report combines hard factual statistical data from official sources (such as Office for National Statistics and Family Expenditure Survey) with Saga’s own exclusive nationwide Populus Survey of more than 12,000 people aged over 50.
In identifying some of the key drivers that impact the daily lives of this age group and by tracking the quality of their lives, Saga hopes the Quarterly Report and its Quality of Life and Price Indices will improve the understanding of the lives of the over 50s, challenge the way society perceives age and ensure that the concerns and interests of the over 50s are on the agendas of politicians, decision-makers and the media.
Each report includes The Saga Quality of Life Index which measures perceptions of happiness, standards of living and health and has been modelled by Cebr from Saga Populus Survey data to form an Index which can be tracked over time.
**Saga Quality of Life Index - May, 2011
The Saga Quality of Life Index is comprised of three equally weighted sub-indices:
1. The Standard of Living Index – which is based on answers to the survey question: “Over the past year, how has your standard of living changed?”
2. The Happiness Index - which is based on answers to the survey question: “All things considered, since last year would you say you are much more/more/about as/less/ much less happy?”
3. The Health Index - which is based on answers to the survey question: “Compared to this time last year, how is your health?”
Answers to the questions (which are multiple choice) are scored according to the following conventions:
Question response Score
Much better 1
A bit better 0.5
About the same 0
A bit worse -0.5
Much worse -1
A weighted average of the survey responses, based on these scores, yields each of the sub indices. A score of 100 would imply that every survey respondent has indicated much improved outcome for the sub index. A score of -100 would imply all respondents indicating a much worse outcome.
The Saga Quality of Life Index is the (equally weighted) average of the Standard of Living, Happiness and Health sub-indices. It too is limited to the range -100 to 100. A score of 100 would imply that every survey respondent has indicated much improved standard of living, happiness and health compared with 12 months ago. A score of -100 would indicate much worse outcomes, for each of these indicators, for each survey respondent.
The Report also includes the Saga Price Indices, which are bespoke measures of price inflation for the over 50s, showing how inflation is affecting the cohorts age 50-64, 65-74 and the over 75. These indices have been compiled for Saga by the Cebr, using statistical data from the Family Expenditure Survey to re-weight the official basket of the consumer prices index to represent the spending patterns of each age group.
For more information please contact the Saga Press Office on 01303 771529
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