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Mounting expenses leave over-55s paying an extra month’s worth of bills – despite growing incomes

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Our latest Real Retirement research is a real mixed bag, reflecting people’s thoughts about retirement today.

Over-55s’ highest income in four years is overshadowed by extra spending. 

 

            
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Incomes have typically risen by 7% in the last year (from £1,444 in December 2012), making a difference of £101 each month or £1,212 each year to the typical over-55.

The trend looks to have been fuelled by a jump in 55-64s who receive wages and other earned income (62% vs. 55% in December 2012). Plus, a growing number of over-55s drawing income from employer pensions (39% vs. 36% in December 2012).

                   
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But typical spending by over-55s has risen by 9% in the past year – cancelling out their income gains and leaving them to manage an extra month’s worth of outgoings.

Monthly payments on food, housing and energy are £53 more than a year ago.

 

                     
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On top of that, housing costs (including mortgage or rent) have increased by £24 a month since December 2012.

 
 
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Cost of living increases could be responsible for savings pots falling, too.


 

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Despite that, commitment to repaying debt reduces borrowing by 23% in two years.

The over-55s have increased their typical monthly debt repayments by £14 (8%) in the last twelve months. 

 

                     
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On a positive note, fewer over-55s worry about living standards.

Just 21% expect their standard of living to deteriorate in the next three months.

Fewer over-55s (76%) are worried about the rising cost of living over the next six months than was the case in December 2012 (80%).

 
   
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Clive Bolton, Aviva’s managing director of At Retirement, said:

“People may have little power to hold back the tide of rising prices, but with the economy starting to improve they can look to draw on all their existing assets to maximise their income in later life. Despite the challenging environment, there are options that can help over-55s to realise their hope for a comfortable future.”

Our Retirement Centre has information to help you find out if you’re ready to retire.

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