Over 55s reap income boost as economy recovers
Over 55s are enjoying £150 a month extra income compared to last year as a result of the economic recovery, Aviva’s Real Retirement Report has found.
The insurer’s snapshot of 55-75-year-olds finances found saving rates were also improving with an average £198 a month being put away. It is the best rate in three years, the firm said.
Spending is also at a high of £816 a month, unsecured debt has fallen and two-thirds of over 55s own their home outright.
Aviva’s Spring 2014 Real Retirement Report assesses consumer finances across the UK’s three ages of retirement: pre-retirees (55-64) retiring (65-74) and the long-term retired (over 75s).
The report said over-55s typically receive an income of £1,373 a month – an extra £151 a month compared to the same time last year (Q1 2013). Two years ago overall incomes were £1,157. That is £216 less than today.
Pre-retirees have seen the biggest increase with a typical £1,402 per month compared with £1,368 for those aged 65-74 years and £1,290 for those aged over-75 years.
Aviva said savings and investments were partly behind the income rise. Almost a third of people polled named this as a source of income, compared to a quarter in 2012 and 2011.
Aviva retirement solutions managing director Clive Bolton said: “Improved levels of income will make it easier for the over-55s to maintain the standard of living they desire. The fact that people are saving hard is hugely encouraging given the strong campaigning by the industry for people to create a better level of financial stability for them and their families in retirement. Unexpected expenses will impact less on their finances if they have a decent nest-egg.”
In spite of positive income and savings levels, the provider did find the older age group continued to struggle with the cost of living crisis.
Monthly spending is at a record £816 a month, it said. Food, fuel and lighting, housing, motoring and holidays were all big sources of expenditure. The cost of all these things has increased over the past 12 month.
“The cost of living is a continual worry for the over-55s who typically suffer more from increases to household bills since it makes up a bigger proportion of their outgoings,” Bolton (pictured) said. “Having better incomes and more robust savings will help counteract the increases in expenditure for many and is a sign of an improving economy.”