According to our analysis of figures published by the Office for National Statistics, just one in four over-50s who have been made redundant are back in employment within three months while just over a quarter (27%) of workers in their 50s return to a new job ‘quickly’, representing a two-year low. When compared to younger workers who have been made redundant, the 35 to 49-year-old demographic has more than double the chance of returning to work quickly as 55% found a new job within three months.
Not only is your 50s arguably the worst time to lose your job, it can also spell the end of your working life and the start of an early, unwanted retirement. The financial consequences of this early retirement can have severe knock-on effects in later life and cause pension pots and savings to run dry. For those who experience redundancy in the run up to their retirement, tapping into housing wealth could prove to be both fruitful and essential.
Many may assume that the over-50s would have become solidified in their employment, an essential cog in the machine of businesses up and down the country, but, unfortunately, the data speaks to a very different story. The impact of these figures are especially borne out in the stories and experiences of real people who have seen their future retirement plans transformed by their redundancy.
One such story is presented in a recent report funded by the Leverhulme Trust – The Future of the UK Equity Release Market: Consumer Insights and Stakeholder Perspectives. The report, which I recently attended the launch of, is not only a valuable asset for everyone in the equity release industry, but also an interesting read containing numerous enlightening case studies. One such case study describes the story of Bill, an 82-year-old single man, who was made redundant at the age of 57 and was unable to find another job.
Once Bill had entered retirement he came to realise that his redundancy had caused his pension pot to be depleted at a much quicker rate than he expected and, to add to his worries, his flat needed urgent repairs totalling over £25,000. Having used his savings and pension to simply get by in the early years of his retirement, this added cost was extremely unfortunate. Bill was refused a traditional loan because his income was too low – facilitated by his redundancy – and he was judged to be too old, so Bill turned to equity release.
Bill’s flat, like many other properties in the area and across the country, had increased in value at a great rate over the years and he was able to release a lump sum of £69,000 – enough to pay for the repairs as well as having enough to live out his remaining years in financial comfort. Bill, when interviewed for the report, stated that: ‘I had to make a decision, that was it, and I have no regrets, it was the right decision, time has proved me right’.
Andrea Rozario is chief corporate officer at Bower Retirement Services
