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Deliver at least 6 major not for profit partnerships for Legal & General group businesses that provide us with insights into emerging macro trends that our business needs to better understand in 2016
Our commitment to improving life in retirement
Helping people have a stable level of pension income in retirement is fundamental to our business and is much more than a ‘campaign’. We help individual people and companies in most important areas of pension provision. Our investment management business (LGIM) is the UK’s largest manager of pension fund assets and is a major provider of auto-enrolled pensions, a government scheme which has helped over seven million people in the UK save for a better retirement. We help companies reduce the risks on their corporate pension schemes, ensuring that scheme members can get their pensions paid on time and in full. We also help people manage their money in retirement, helping them make the most of their pension savings or enabling them to boost their funds through releasing money from their housing equity.
Because our business is so focused upon the needs of pensioners we want to do more to help all elderly people through working closely with organisations and charities that support people in retirement.
The impact of increased longevity
The number of people aged 75 in the UK is projected to double between 2015 and 2050. This is already impacting the affordability of state retirement pensions, where the retirement age is increasing to 67 from 2026. We are also seeing rapidly rising costs of elderly social care that need to be met by local authorities and families. Our position is that the state, the financial services industry and employers need to work together to help people fund retirement costs.
We are sponsors of the International Longevity Centre – UK (ILC-UK) who focus on some of the biggest challenges facing government and society in the context of demographic change. The ILC host an annual Future of Ageing Conference to discuss how the UK can meet the challenges and the opportunities of a rapidly ageing society
We’re associated with a number of external longevity science institutions, including University College London. We also support the Longevity Science Advisory Panel (LSAP), an independent panel of leading authorities who are experts on longevity issues.
What are some key issues that elderly people face?
Poverty and debt
Pensioners in general are getting wealthier, with many recently retired ‘baby boomers’ benefitting from attractive defined benefit pensions and high levels of housing wealth. However, 28% of pensioners receive no income from private pensions. In addition, more than 21% of older people over 55 have no housing wealth at all.
Age UK report that 1.6 million or 14% of pensioners in the UK, live in poverty (defined as having incomes of less than 60% of net median income), with a further 1.2 million pensioners living just above the poverty line. In addition, the average pensioner owes an average of £34,000 on credit cards, outstanding mortgage balances, loans and overdrafts.
What we do
- We work with ‘StepChange’ who help us understand how vulnerable customers behave when faced with debt and insolvency.
- Our lifetime mortgage plans enable retired people to consolidate relatively expensive short-term debt by releasing equity from their homes which is paid off on death. Paying off existing debt is the most common use our customers make from the money raised from a lifetime mortgage.
- We have supported improvements in auto-enrolled pensions on issues of charges, contribution levels and coverage to ensure future generations have better pensions.
Wellbeing and remaining active
Current UK Government advice recommends 150 minutes of moderate aerobic exercise a week for older people. Research shows that elderly people who spend most of their time sitting down age significantly quicker than more active people.
It is also vital to keep an active mind in old age and become involved in activities outside the home. In fact nearly 4.9 million people aged 65 and over in England take part in volunteering or civic engagement. This is more than 50% of that age group.
Rehabilitation after hospital stays is vital for elderly people to ensure that they recover their health quickly. Our partnership with the Royal Voluntary Service (RVS) enables volunteers to help the NHS resettle older people.
What we do
In 2016, we worked with the RVS in Queen Alexandra Hospital in Portsmouth. This financed volunteers to support people who are returning home from hospital. Activities included preparing the home for the return from hospital, for example putting the heating on and ensuring there is a supply of basic food, lending a hand with shopping, collecting prescriptions or just simply being there when recovering.
At age 65, men in the UK can expect to live on average another 10.7 years in good health. Women can expect to live 12.1 years in good health. This is just under 60% of their expected remaining life span. Men will live their last 7.5 years with a disability, with women living out their last 10 years with a disability. The over 65s make up over 40% of admissions to hospital.
Dementia is one of the main causes of disability in later life and is the leading cause of death for women in the UK. The most common type of Dementia is Alzheimer’s disease, which accounts for 62% of all cases of dementia. Alzheimer’s charities such as ‘Alzheimer’s Research UK’ not only research the causes of Alzheimer’s and aim to find a cure, but also campaign to create greater public understanding.
What we do
- We ensure that our front-line employees, who provide customer service for elderly disabled people, understand their needs through our Vulnerable Customer training. We have extended this training to all UK employees.
- We support organisations such as ‘Alzheimer’s Research UK’ who work with people with dementia.
Our work with ‘Alzheimer’s Research UK' in 2016
In 2016 we helped Alzheimer’s Research UK with funding to further develop a virtual reality smartphone app – A Walk Through Dementia. This training tool is aimed to help public and health professionals understand dementia.
Finding suitable accommodation
Retired people cover many different wealth groups, social groups and life stages so their housing needs cover numerous categories.
The UK suffers from a lack of specialist accommodation suitable for people in declining health. Only 1% of 60+ people in UK live in specialist retirement housing, compared to 13% in Australia and 17% in the US. There are 3.3 million elderly people looking to downsize, yet only 7,000 specialist homes are being delivered each year. Yet these ‘last time buyers’ have £820 billion in housing wealth, projected to reach £1.2 trillion in 2020.
Politicians from most parties agree that care is in a crisis, whether care in your own home or in a care home. However solutions are proving exceptionally difficult to agree upon given the growing size of the elderly population, the shortage of local authority funding for care and the increasing demands on the NHS. Our 2016 ‘Older People’s Healthcare Survey’, produced by the Family and Childcare Trust showed that only one in five funding authorities reported having enough older people’s care in their area to meet demand.
As well as the shortage of suitable care homes, the UK also struggle to provide adequate domiciliary care. More than 300,000 carers were forced out of the workplace last year because they were not able to work flexibly. One in five people aged 50–64 in the UK are carers, with 65% of older carers (aged 60–94) having long-term health problems or a disability themselves.
What we do
- We support organisations that help people access specialist accommodation and campaign on housing issues, such as the Elderly Accommodation Counsel. The Elderly Accommodation Counsel help older people meet their housing needs right from suitable smaller homes in early retirement through to finding the most suitable care home.
- We have been campaigning for many years to encourage companies that invest in housing, as well as house builders, to consider building more homes for ‘last time buyers’.
- We have invested £350 million in ‘Finance for Care and Extra Care’.
Our work with the Elderly Accommodation Counsel in 2016
Since 2010, we've been proud to sponsor the Elderly Accommodation Council's (EAC) National Housing for Older People Awards, which celebrate the best examples of housing for later life, including care homes. In 2016 we also carried out ‘Planning ahead’ research which identified trends in later life at local and national level. The survey identified that the top five family concerns were:
- General Health
- Physical decline
- Possible onset of dementia
- The effect of one on losing the other
- Loneliness and social isolation
Loneliness and social isolation
Older people are often excluded from social activity in society. Isolation, loneliness and poor social relations are major factors leading to the exclusion of older people. Social isolation affects about one million older people, and has a severe impact on people’s quality of life in older age.
We strongly believe that better housing provision for elderly people would be positive in reducing loneliness. Living in a retirement village setting has the potential to reduce social isolation, especially for residents who move there from more rural or remote locations. In addition, our 2015 ‘Last Time Buyers’ report showed that elderly people wanted to be able to live close to family and friends, with access to good transport and health facilities.
What we do
- We are developing plans to build retirement homes for older people that have the potential of reducing loneliness and social isolation.
Financial guidance and advice
The introduction of ‘pension freedoms’ in 2014 meant that many retiring people had to choose how to manage the money they had built up in the defined contribution pension pots. With very few people seeking regulated financial advice, we encouraged people to find solutions through seeking phone guidance.
More difficult is the provision of financial advice for people when their health declines and they begin to need specialist help in the home. Our lifetime mortgage business works closely with the Retirement Lending Advisers, a separate company who have specialist advisers that advise on lifetime mortgage products.
What we do
- We have been active in the FCA’s Financial Advice Market Review which seeks to make financial advice more widely available for all people
- We work with ‘Tax Help for Older People’ who help people with specific tax issues
Our work with ‘Tax Help for Older People'
Tax Help for Older People help train Legal & General Retirement employees to help older people on lower incomes on their personal tax issues on pensions.