By Yasmin Noone
Older single women on low incomes and in poor health bore a major brunt of the recent global financial crisis (GFC) in Australia, according to new research released by National Seniors Australia today.
The results of a recent survey, conducted by the National Seniors Productive Ageing Centre, showed that 40 per cent of participants considered themselves to be “worse off” after the onset of the GFC in late 2007, despite Australia weathering the financial storm better than most other countries.
Of those living alone, a total of 45 per cent of women reported being negatively affected by the GFC, compared to 38 per cent of men.
Around half the employed baby boomers surveyed, who had not yet retired, said they had been affected by the GFC and therefore needed to delay their retirement because they did not have enough money to give up working.
Those who were already retired but unable to return to work to restore their bank balance, because of poor health, said they had no choice but to cut spending and wait until economic conditions improved.
These results stood in stark comparison to the 27 per cent of survey respondents who rated themselves as being ‘financially secure’ and confident of their future, despite the impact of the GFC.
“Women, older baby boomers, retirees, and those in poor health reported the lowest levels of household income and have been identified as the most financially insecure following the GFC,” the report states.
“It is these groups that are most at risk for poverty in later life, particularly if financial markets are slow to recover or new financial crises arise.”
The aim of the report, Ageing Baby Boomers in Australia: Understanding the effects of the global financial crisis, was to examine the effects of the GFC in order to better inform positive action for protecting baby boomers’ well-being in retirement.
According to the research, the GFC “undoubtedly triggered working baby boomers to rethink their retirement plans and preparations and, to a lesser extent, retirees’ plans to return to the workforce”.
“For example, some working baby boomers have decided to make more voluntary superannuation contributions, while others will withdraw their superannuation balances early at the expense of tax bonuses down the track.”
The GFC also impacted upon baby boomers’ life satisfaction, retirement optimism and expectations of health care.
“Whether their retirement will be as good as expected will depend, in part, on the health care they are afforded by future governments.
“This is where opinions differed greatly across the sample generally and across those who were affected and not so affected by the financial crisis.”
She believes those at the greatest risk of being negatively affected by the GFC are older adults on “low incomes, those on part-pensions and people who do not own a home, because they have nothing to fall back on financially”.
“The majority of whom,” Dr Bridge added, “are women.”
Dr Bridge also confirmed that previous, separate research clearly indicates a relationship between financial vulnerability, home ownership and low income levels.
“Less money in the pocket means that people will have to move further away [from where they have lived] to find cheaper accommodation so they end up further away from the services [they used to receive in their own community].”
This, she said, could all impact upon an older person’s physical, mental and emotional health.
“Older single women have always been at a greater risk of financial vulnerability. It’s just that the GFC has made [their vulnerability] more apparent.”
The Benevolent Society’s general manager for ageing, Barbara Squires, said the National Seniors survey results come as no surprise.
“It’s well known that women enter retirement with less superannuation than men,” Ms Squires said.
“The most severely affected are women who were in and out of the workforce raising children, often working part time and who then separate from their partners.
“The Benevolent Society is particularly concerned about the increasing number of women entering retirement who don’t own their home.
“They have either they’ve never been able to buy their own home, or they have lost it due to a marriage break up.
“More people are going retirement still paying off a mortgage. There’s already a great shortage of affordable housing for rent or purchase, and we’re going to need a lot more in the future.
“The fastest growing group of homeless people is older single women, and this will only get worse without a lot more affordable housing.”
Ms Squires comments on dwindling home ownership rates are backed up by statistics in the peer-reviewed Australian Housing and Urban Research Institute (AHURI) paper, Age-specific housing for low to moderate-income older people, released late last year.
According to the AHURI paper, only one in 40 people aged 65 and over will own their own home by 2050 (read AAA article by clicking here).
It also implies that home ownership could become a thing of the past in the near future, with projected home ownership rates due to drop dramatically over the next 40 years, forcing non-home owners to continue working well into the traditional retirement years to pay the rent or continue paying their mortgage.
Future proofing against further vulnerability
The National Seniors Australia report called for researchers, governments, and employees to place a greater focus on the “more vulnerable groups” like older, single women when creating policies to “future proof” against future financial crises.
It also suggests that employers and governments need to concentrate on making workplaces more welcoming to older workers.
“One of the best ways to do this is to reduce ageism in hiring practices and work cultures,” the report states.
“In any future financial crisis, those needing to reenter the workforce or prolong their working life should not face entrenched negative attitudes to older workers.
“…Plummeting superannuation reserves during the GFC caused distress and anxiety and changed retirement plans for older Australians.
“Superannuation needs to be easily understood, with transparent investment options and reliable advice.
“Employers, unions and governments should work together to make this happen.”
Finally, the report recommended that more programs be developed and promoted to help older people stay healthy and socially engaged.
Not only are these programs important for the well-being of older people, but in the case of a future financial crisis, they will help older adults prevent or deal with financial stress by remaining active, engaged and socially resilient.
National Seniors’ chief executive, Michael O’Neill, said baby boomers were a resilient group who should be encouraged to keep working and stay healthy and active.
“Baby boomers applying for jobs are disadvantaged by ageism and negative attitudes still held by many employers,” Mr O’Neill said.
“It’s in the interests of governments and the boomers themselves to have policies in place that counter these attitudes, along with transparent investment options and reliable advice that will allow them to better cope with any future financial crises.”