Half of pensioners rely on benefits and discounts to get by
New research from Prudential has revealed that 51% of pensioners would have to make significant alterations to their lifestyles if it wasn’t for the range of benefits, discounts and concessions they currently receive.
It found that the average retired household benefits by as much as £17,500 a year from direct and indirect financial support.
The latest research comes after it was revealed that one in seven people retiring in 2016 will be reliant on the State Pension, so Prudential delved further into the saving and spending habits of retirees.
On average, retired households received a total of £11,227 a year in cash benefits from the State, including £8,954 from the State Pension and £2,273 in additional benefits such as housing benefit and attendance allowance.
Pensioners also receive benefits in kind such as healthcare and travel subsidies. According to Office for National Statistics figures, benefits in kind are worth £6,274 each year to the average pensioner.
Prudential’s research also looked at the concessions and perks pensioners receive on discretionary spending such as event tickets and entry fees. The results show that the average pensioner estimates they benefit to the tune of an additional £88 a month – or just over £1,000 a year.
Worryingly, more than a third of pensioners said they would not be able to afford dental treatment or have eye tests without OAP state subsidies, while three in 10 feel that public transport would be unaffordable without pensioner concessions.
Nearly one in four (23%) said that days out would be out of the question if OAP discounts were not available, and just under one in 10 would not be able to afford a TV license.
‘Pensioners may find supplement to income cut in the future’
Vince Smith-Hughes, a retirement income expert at Prudential, said: “With the ONS estimating that the typical household takes a 40% drop in income on retirement, it is understandable that pensioners come to rely on concessions and discounts to maintain their quality of life.
“However, much of the direct and indirect support received by pensioners is at the discretion of the State or other organisations. With the average retirement now lasting 20 years, the debate on the affordability of universal support for the retired will continue, and pensioners may find the supplements to their income being cut in the future.”
Smith-Hughes added that in order to maintain the quality of life in retirement, the best approach is to save as much as possible as early as possible and if making any big decisions, individuals should consult a professional.