This is what one of my clients said to me
when he first came to seek advice for his rent arrears. It was in September
2016. He was 56 years old but would not be eligible for the state pension for
another decade. What struck me about him was his proposal to unlock his pension
funds to pay for his rent arrears. It made me think about men in his age group,
how they lived and how severe their financial and other problems can be and the
challenges they face trying to rectify it. These are problems that, as things
stand, will persist until their retirement age.
As I dug deeper into this gentleman’s
personal circumstances, I discovered how he had fallen into poverty. His life was
thrown into chaos once he was faced with early retirement. He previously worked
for a local council and his role was made redundant. He was presented with two
options: retire or take compulsory redundancy from his job. This was a role had
held for over 25 years. He opted to take
early retirement. He struggled to adjust to his new circumstances. His marriage
came under strain due to money troubles, his depression and anxiety. His wife
initially tried to help and support him, but she found it hard to cope with his
mental health problems. As a result, she
asked him to leave their council home. His 20 year marriage ended a year after
he retired.
He lived rough for a few days and then
found private accommodation in Summer 2016. He paid £750 per month for a
room. He shared the flat with two other
housemates whom he rarely saw and had some savings from which he paid his rent.
However, he used up his savings and could no longer afford the rent.
When he moved into the room, he did not know
whether he could claim housing benefit for it. If he had applied for housing
benefit before 1st April 2016[1], he could
have backdated it for the three and a half for months he was in arrears. The
actual rule, in force at the time, allowed him to claim up to 6 months of his
initial claim date if there was a good reason for it. From 1st April 2016 any
claim made were only allowed to be backdated for only one month regardless of
the reason. This was the new policy
introduced by the current Conservative Government.
The Coalition government (2010 - 2015)
introduced another policy. From 1st April 2015 any person, who is 55
years old or above, could gain access to all their pension funds. The purpose of this policy was to put the
pension holder in control of their pension funds and withdraw all their savings
if they choose.[2] Given this
man’s circumstances, I doubt whether he was choosing to get his pension fund
released to better himself. A more accurate reason would be that he was withdrawing
his pension funds to avoid destitution.
Initially I had no idea of such a rule when
I advised him because I recommended to him that he see a financial adviser. If
he has, subsequently, fallen into the wrong hands, it could be that he may have
lost more than his accommodation. There has been a dramatic rise in fraud
related to unlocking pensions. A large number of people have been duped into
releasing their pension early only to then lose all of their life savings.
Fraud Action, which investigates online fraud, reported that between April 2014
and May 2017 fraudsters stole nearly £44 million[3]
by giving false advice and transferring the money to a broker. The promised
returns did not materialize leaving the victim penniless.[4]
Although I have had no further contact with the man beyond our first debt
advice meeting, I hope he does not become one of the victims who have been
conned in this way.
There appears to have been little
assistance given to him to aid his recovery from the trauma of separating from
his wife, being made redundant from his work and the anxiety of being evicted
from his home. At face value he did not appear to be in a mental health crisis.
If I were in his situation, I would have needed professional support from a
mental health practitioner to recover. According to Age UK, half of adults aged
55 and above have experienced mental health problems. In terms of understanding
the data in another way, it is about 7.7 million people. [5]
Age UK’s research also shows that 35% did not know where to go for help and
support if faced with such a crisis in their lives. [6]
Could there be any other support he may
need if his landlord successfully evicts him from the property and he becomes
homeless again? It is going to be difficult
for him to qualify for the local council’s priority list for social housing
based on his existing circumstances. According to Shelter the waiting list for
social housing in the UK has reached a record high of more than a million.[7] It is hard
to believe that local authorities would prioritise him. Households with
children and severely disabled members are often given priority for emergency
accommodation. The local council may also argue that he made himself
intentionally homeless by not paying his rent in time and getting into rent
arrears from his landlord. I believe that he is in debt because of the current
government’s rule change on housing benefit claims.
In terms of him getting him ready to re-enter
the labour market, I am not sure whether
this is possible until he has a stable home environment. There are over a
million people in the UK, in their 50s, who are willing to work but cannot work
due to age discrimination. This has been emphasised by the Women &
Equalities Committee who found that the labour market prefers younger workers. [8] Even for this man to start thinking about employment
he would require professional advice, help with his CV, assistance in cover
letter writing and preparation for job interviews. He may also require
appropriate clothing to wear for an interview. The process of returning this
man to the labour market appears to be very complex indeed.
This tragic story has illustrated how those
who seek debt advice often do not just have problems concerning money. They
bring many other societal issues that are beyond my control as a Debt
Adviser. This gentleman initially
asked me if his landlord would stop eviction proceedings if he released his
pension funds. In truth this man requires more than advice on debt if he is to
stabilise his circumstances and live a decent life.
[1]
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/503330/a3-2016.pdf
[5]https://www.ageuk.org.uk/latest-news/articles/2017/october/half-aged-55-have-had-mental-health-problems/
[6]
https://www.ageuk.org.uk/latest-news/articles/2017/october/half-aged-55-have-had-mental-health-problems/
[7]
https://www.theguardian.com/society/2018/jun/09/more-than-1m-families-waiting-for-social-housing-in-england
[8]
https://www.independent.co.uk/news/uk/home-news/over50-unemployed-waste-women-equalities-committee-mps-pension-a8449446.html
Yet another human disaster created and multiplyed by Tory policies. They shame the entire nation by how our vulnerable are treated.
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