Financial Midlife Crisis

Over-50s are facing a financial midlife crisis with poor financial health hitting their work life and retirement plans

• Nearly one in three 50 to 55-year-olds admit their financial health is poor and more say they are unhappy compared to those who say they are happy
• One in four fear their jobs are at risk and 1.3 million have delayed retirement plans
• Almost two out of five say not saving enough is their biggest financial regret, Investec Wealth & Investment study shows

Over-50s are increasingly battling a financial midlife crisis with nearly one in three (32%) rating their financial health as poor and many admitting this is damaging their physical and mental well-being, a new study* from Investec Wealth & Investment shows.

The wealth manager carried out the research to understand how the 5.55 million UK adults aged 50 to 55, who are often grappling with the pressures of supporting children and parents, are coping with current financial pressures and keeping their lives on track.

It exposed major worries about work life with around one in four (24%) – the equivalent of some 1.33 million people – fearful about job security with nearly one in 10 (9%) so worried they expect to lose their jobs.

Retirement plans are being put on hold – 24% say they have had to delay their retirement plans with around 670,000 people aged 50 – 55 putting their plans to stop work back by five years or more.

And they are not enjoying life – respondents were asked whether they were happy or unhappy on a scale of 1 to 10, with one representing very happy and 10 very unhappy. The results showed 28% of people aged 50 – 55 rated themselves as 8,9 or 10 for unhappiness compared with 22% who rated themselves as a 1,2 or 3.

The financial midlife crisis

The unique nationwide study asked those aged between 50 and 55 to rate their own levels of physical, mental, and financial health as the table below shows.

The biggest financial regret over-50s wish they could go back in time and change is not saving enough. Around 38% regret not saving more while 19% wish they’d chosen a better paid career. Around 15% wish they’d started a pension sooner and 13% say they wish they had got on the property ladder earlier.

Job worries

Around half (50%) of 50 to 55-year-olds in work say they will not ask for a pay increase in the year ahead. Most (72%) say they won’t ask because they don’t believe their employer can afford to give them one. But one in four (25%) worry that asking for a pay rise will put their job at risk as their employer could think they were too expensive.

Nearly half (49%) have had pay rises in the past 12 months but 17% of those questioned said it had been two years or more since they had received a salary increase. Around 6% said it had been five years or more.

Retirement on hold

Nearly one in five (18%) will work past the age of 70 with around 7% – the equivalent of almost 400,000 saying they never plan to retire. The main reason for delaying is the cost-of-living crisis. Three-quarters (75%) blamed the rising cost of living while around one in three (32%) say their pension and investments have dropped in value because of stock market volatility.

Faye Church, Chartered Financial Planner at Investec Wealth & Investment, said: “Financial health is important at all ages but particularly crucial as people enter their 50s and are heading for retirement as well as potentially facing other financial challenges such as supporting children through university or with a first home.

 “Being prepared and making informed decisions is key to financial health and expert financial planning advice can support people with taking control of their finances. By focusing on the future now, it can give peace of mind knowing that you are on track to meet your goals, or at the very least know what you need to do with time to make any changes where necessary. Those aged 50 to 55 are at a particularly vulnerable point in their lives and would benefit from expert financial support on how to plan for the future.”

Leading psychologist Professor Sir Cary Cooper CBE said: “Everything that has happened since the Financial Crash has made people feel insecure and has affected people’s financial health. It is depressing to see that so many 50 to 55-year-olds say they are unhappy and facing a financial midlife crisis.”

“That is being driven by the lack of control and uncertainty people feel about their lives. We need to get younger generations to understand the importance of investing and the fact that it does give people more control over their lives. You can do things yourself if you are financially stronger.”    

Investec Wealth & Investment works closely with individual clients to plan and manage their wealth, and with charities, trusts and clients of professional advisers to help deliver optimal returns on their investments and bring financial peace of mind.

As one of the UK’s leading wealth management companies Investec Wealth & Management focuses on a relationship-based approach to Financial Planning and Investment Management with the purpose of making a tangible and meaningful difference to clients and their families.

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