Life may begin at 50, but according to research from Investec Wealth & Investment, it's also the age that's the most expensive, with mortgage, education and living costs combining to make it the most costly age of all.
According to the survey, 50-year-olds have average annual living costs of £27,231, almost £3,800 higher than the average annual expenditure for all age groups, which stands at £23,433. This is comprised of living expenses (£7,033), mortgage/rent (£5,019), transport (£2,078) and education (£1,231), and can incorporate pressures from every end of the spectrum. Not only will this age group still need to serve their own mortgage, but they may need to pay for their children's university fees and help cover the care costs of older relatives, too.
Those aged 50 are also likely to be saving and investing the most as thoughts of long-term finances become increasingly pressing, with the average 50 year-old saving £4,883 per year – another draw on their everyday finances. Potentially, given that people can expect their pay to peak between the ages of 40 and 49, turning 50 becomes the point at which outgoings can be highest and earnings start to decline, putting additional pressure on household budgets.
Nick Gartland, of Investec Wealth & Investment, said: "Today's 50-year-olds have a tough financial balancing act that involves saving as much as they can for retirement while still facing significant financial commitments such as a mortgage, dependent children and large household bills. Turning 50 used to be a signal to increase retirement savings, but times have changed as today's generation face additional financial pressures that make this difficult.
"As today's 50-year-olds can expect to live for around another 30 years, this poses additional challenges as savings will need to last a significant period of time, and money must be carefully managed. It is therefore crucial that people put in place effective, long-term financial plans as early as possible to cater for the rollercoaster costs of life."
Whether you're approaching the big 5-0, have decades to go or have already passed the milestone, one thing remains key – the importance of planning. You'll want to make sure your financial affairs are in place so you can cope with anything life could throw at you, and there are several things you can do to ensure you're suitably prepared.
First of all, make sure you save as much as possible from as early as you can. Turning 50 may be the time when most people start saving more, but if you can sneak away extra funds during your earlier working years, saving for retirement won't become such a financial pressure.
Alternatively – or in addition – try overpaying your mortgage. Many people are enjoying record low mortgage rates and low monthly repayments as a result, which means now could be a great time to pay more. Doing so will mean you can reduce the amount of interest and potentially clear the balance sooner, and that way, mortgage costs may not be so much of a concern as you get older. Whatever you do, make sure to start planning early and have suitable provisions in place, and hopefully your 50s won't be too expensive.
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