The research group warns that over-50s face a lifetime of financial insecurity.

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Over-50s are facing a lifetime of financial insecurity as a report shows which age group is being hit hardest by the cost of living crisis.

Research by the University of Edinburgh’s Smart Data Foundry has found that the rate of economic inactivity among over-50s has risen by a third since 2019.

And according to leading UK data scientists, 50 to 54-year-olds are twice as likely to take financial risks as 70- to 74-year-olds.

The report says this is leaving people in their 50s and 60s facing a “perfect storm” of redundancy and ill health, coupled with a lack of savings on pension provision.

Older workers are at real risk of financial vulnerability, but it’s not too late to act.

People are being forced to make tough financial decisions, such as taking lump sums out of their pension pots, to cope with the pre-retirement income shock.

With most pension pots worth less than £30,000, the measures are expected to have a knock-on effect with income tax and benefit entitlements.

The UK government is now being urged to intervene to prevent irreversible damage to the over-50s.

Dame Julie Unwin, chair of the Data Group, urged the Department for Work and Pensions (DWP) to act to reduce the risk of pension assets being spent before retirement.

The report proposes an increase to the current capital limit of £16,000 for means-tested benefits.

He said: “We’re seeing people in their early to mid-fifties looking at their future retirements in comfortable positions as middle-aged earners, leading to a generation Who suddenly find themselves facing long-term financial difficulties.

“A combination of the inability to secure viable work, confusing pension messaging, little through state support, and brutal price hikes can result in decisions that have long-term negative consequences. There may be consequences.

Any disruption to earning capacity in the decade before the state pension is forcing older workers to reduce their retirement savings with little ability to top up the pot, resulting in lifelong financial vulnerability. There is a danger of living.

“With this report, our key recommendations, we are calling on the UK Government to intervene to protect and support the most vulnerable before it is too late.

“If they don’t act now, we will undoubtedly see even bigger problems in the coming years.

Data doesn’t lie. The evidence is in – older workers are at real risk of financial vulnerability, but it’s not too late to act.

The report also revealed that older workers are facing barriers to returning to work, including a lack of digital skills, ageism and a lack of government initiatives.

Dr Leanne Robertson-Rose, from the University of Edinburgh, said: “We set out to understand the financial vulnerability of people in their 50s and 60s and were shocked by the bleak picture of the data.

“Any disruption to earning capacity in the decade before the state pension is forcing older workers to reduce their retirement savings with little ability to top up the pot, resulting in a financially vulnerable lifetime. It poses a threat to everyone.”

This research was supported and funded by the abrdn Financial Fairness Trust.

A DWP spokesman said: “We know that older workers approaching state pension age are a huge asset to our economy while we provide a strong welfare safety net for those who cannot work. This includes Universal Credit.

“We also understand that people are struggling with rising prices which is why we have worked to protect millions of the most vulnerable this year with direct payments of at least £1,200. And there is a wealth of extra financial support available when people reach the State Pension. Age, including Pension Credit – which currently unlocks an extra £650 cost-of-living payment for claimants – and Winter Fuel. payment