Incomes fall, debts rise and savings drop as over-55s struggle

Article date: 21 September 2011

  • Income hits lowest level since launch of Real Retirement Report
  • A quarter of over-55s have less than £500 in savings
  • Over-55s less optimistic about their standard of living than before 

The UK’s over-55s have seen incomes fall, savings drop and debts rise as they struggle to meet the rising cost of living, reveals Aviva’s latest Real Retirement Report. This report - which is the seventh in the series – highlights the financial challenges that the three ages of retirement (55-54; 65-74 and over-75) face.

Incomes fall:

Typical monthly income for UK over-55s has fallen to £1,216 (September 2011) from £1,294 (June 2011). This is not only lower than the last quarter but also the lowest monthly income recorded since the first Real Retirement Report in February 2010 (£1,250).  

The over-75s (£999) have the lowest monthly income followed by those aged 65-74 (£1,314) and those aged 55 – 64 (£1,230). In addition, almost a quarter (23%) of over-55s now survive on less than £750 per month.

Savings drop:

Over-55s typically have £10,468 in savings which is 12% lower than last quarter (£11,907 – June 2011) - a clear indication that not only are some people not saving but they are in fact dipping into their savings. 

With 73% of over-55s worried about the rising cost of living, it is interesting to note that a quarter now have less than £500 in savings. Pre-retirees (55-64 years old) who are more likely to be economically active are most likely (29%) to be in this situation followed by the retiring (65 – 74 years old - 21%) and long-term retired (over 75 years old -19%).

The fact that pre-retirees have very low savings is unsurprising as 46% are saving nothing each month (retiring – 36% and long-term retired – 26%).

Debts increase:

While the majority of over-55s are not in debt, those who are, typically owe £20,001  which is up from £17,112 (May 2011). This is a substantial increase and likely to be attributable to people using borrowing to meet seasonal costs such as holidays, increased day-to-day living expenses or unexpected bills.

It is interesting to note that while there is a drop in typical debt for all over-55s between the ages of 55-64 (£2,471) and 65-74 (£1,864), it increases marginally amongst the over-75s (£1,970). This "bounce" is also apparent when you look at types of debt – for example, just 12% of the retiring have an overdraft but 19% of the long-term retired use this type of borrowing.

Percentage of over-55s who hold unsecure borrowing products:




Over 75

Credit cards




Personal loans




Hire purchase








Less optimism:

Compared to Q3 2010, over-55s are less optimistic about the future. Indeed, just 4% believe that their standard of living will improve over the next quarter (Q3 2010 – 6%) and 35% think it will deteriorate (Q3 2010 – 29%). In addition, when this age group were asked about their thoughts for the next six months, 73% identified the rising cost of living as being their primary concern.

Clive Bolton, ‘at retirement’ director at Aviva, said: “The over-55s have seen their finances deteriorate over the last quarter as people struggle to keep up with the rising cost of living on a relatively fixed income. That almost a quarter of this age group have less than £500 in savings and 40% save nothing each month is a clear indication that this age group is struggling financially.

“While there is a limited amount that the long-term retired can do to improve their finances, these figures highlight the importance of a lifetime approach to retirement planning. Taking out a private pension, building up a respectable savings pot and paying down debt are all simple steps that people can take to ensure they don’t face these problems in retirement.”


Download The Aviva Real Retirement Report: Issue Seven - September 2011 (PDF 2.25MB)

If you are a journalist and would like further information on a specific family group or region, please contact: 

Aviva Press Office:
Tom Wilson
078 0069 2053

The Wriglesworth Consultancy:
Lee Blackwell / Emma Beresford
020 7427 1400

Notes to editors:

This report was designed and produced by Wriglesworth Research with Opinionmatters. It is a definitive look at the personal finances of the UK’s over-55 population. Not only does it look at personal wealth, income sources and expenditure patterns but also tracks how these change in the "three ages" of retirement.  

Online interviews with over 10,000 UK consumers aged over-55 between February 2010 and August 2011 provided the data for the series Aviva Real Retirement Reports.

Management information was provided by Aviva, with additional data provided by:

  • Department for Local Government and Communities
  • Office of National Statistics – Inflation Data
  • Halifax – House Price Index
  • Aviva – Family Finances Report

A separate press release from Aviva’s Real Retirement Report which highlights the over-55s concerns about long term care and costs can be found at:

About Aviva:

Aviva is the world’s sixth largest* insurance group. We provide more than 53 million customers with insurance, savings and investment products with total worldwide sales in 2010 of £47.1 billion**.

We are the UK’s largest insurer with 19 million customers and one in three households has a relationship with us. Our combination of life, health and general insurance is unique in its scale and breadth in the UK market. Customers can choose to buy our products through intermediaries, our corporate partners or from Aviva direct and we have become the partner of choice for many of the UK’s biggest organisations. 

We are ranked as one of the UK’s top 10 most valuable brands and Aviva plc are in the top 10% of socially responsible companies globally in the Dow Jones Sustainability World Index. In 2010 we invested £4.3m into our communities in the UK, which included 1,500 Aviva volunteers giving 24,000 hours for good causes. In addition, our employees gave £600,000 through fundraising and donating. Read our corporate responsibility report at

Aviva is working in partnership with Railway Children through the Aviva Street to School programme to get children living or working on UK streets back into everyday life. Find out more at

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* based on gross worldwide premiums at 31 December 2010.
** at 31 December 2010.

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