Shocking new figures have revealed almost a quarter of 65-74 year olds still have to work in order to get by.
Far from relaxing in their twilight years, as one would expect, research published in Aviva’s latest Real Retirement Report shows many pensioners are struggling so much they can’t afford to retire.
According to the report the UK’s over-55s are increasingly working past the traditional retirement age and larger numbers are falling back on their savings in later life to meet living costs.
The figures show average monthly income for the over-55s has increased by just £109 in the last two years (from £1,335 in Q4 2010 to £1,444 in Q4 2012). The retiring have driven this trend, gaining £166 overall, while monthly incomes have risen a mere £9 for pre-retirees and fallen by just £1 for the long-term retired.
Monthly spending by the UK’s over-55s has actually fallen in the last year, with average outgoings of £1,231 in Q4 2012 down from £1,269 in Q3 2012 and £1,300 in Q4 2011.
The average savings pot for over-55s has fallen by almost £4,000 in the last quarter (£14,544 – Q4 2012 compared with £18,364 – Q3 2012). This remains larger than a year ago (£11,153 – Q4 2011), but while pre-retirees’ savings have reached their highest level since the report began, total savings have decreased among the two older age groups, both in the last quarter and in the last two years.
The need for the long-term retired to dip into their savings to maintain their standard of living has seen the percentage with less than £2,000 saved grow from 23% (Q3 2012) to 30% (Q4 2012).
What Aviva say
Clive Bolton, managing director of Aviva’s At Retirement business, says: “Whether it’s through choice or necessity, the fact that people are working for longer shows how vital it is to work hard to achieve financial stability, so you can enjoy your retirement without the constant worry about making ends meet.
“The growth of income among the retiring population is a clear sign they are taking the opportunity to prepare for the future, and prioritise their outgoings to clear existing debts. And while the long-term retired may find their savings dwindle in retirement, it’s important to remember that, with the right advice, there are often alternative ways to cope with rising living expenses and unforeseen costs.”