Over one million people over the age of 45 are heading towards retirement with zero cash savings, new research by Fair4All Finance has warned.

A study by the not-for-profit organisation indicated that the percentage of financially vulnerable over-45s with no savings has increased, from 23% to 37%, over a two-year period. It also revealed that the majority of over-45s (58%) currently have less than £1,000 in savings.

Fair4All Finance’s research was based on an online survey of 3,101 financially vulnerable people and suggested that older workers’ financial positions have eroded over the last two years. More than a quarter (26%) are now having to rely on their savings as a primary source of income, while 59% currently have at least one outstanding debt.

One in 10 respondents (10%) are facing more significant debts, of between £2,000 and £5,000, which are stopping them from increasing their savings pots.

Interim director of development at Fair4All Finance, Diane Burridge, commented: “We know the cost of living crisis has continued to undermine people’s financial resilience in the last two years.

“For many older people, it could have a permanent impact on their financial stability and mean that millions become ‘retirees in name only’. In particular, we know from experience that retiring while still renting is incredibly tough and puts further strain on people’s finances in later life.

“With a million financially vulnerable people nearing retirement without any savings, it is vital the financial services sector comes together to help people pay off debts and build a savings safety net, no matter where they are starting from or how long it takes.”

Burridge suggested that credit unions can be a “brilliant place” for struggling people to turn to and help build up small, sustainable savings habits and develop better relationships with money.

Through credit unions and community development finance institutions (CDFIs), people struggling with debt can find more affordable ways to pay these off, such as through consolidation loans at lower interest rates.

“With innovative and accessible products, from consolidating loans to allowing people to save while paying off a debt, credit unions are incredibly flexible and work to find a way to say ‘yes’ to customers that need their support,” Burridge added.

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