According to a recent report, people in the later stages of retirement are experiencing an annual rate of inflation of 6.2% on basic living costs. This is compared with increases of 5.2% for those aged 65-74 and just 0.3% for those aged 50-64.

The report highlights that by 2016, living costs for people aged over 75 could exceed those of people aged 50-64.

The over 75s have seen increases in every spending category except clothing since 2008 and this is a result of negative factors such as higher heating costs, with utility spending up £216 a year.

Spending on health has also increased with annual costs up £231 while spending on food has increased by £268.

Simon Smallcombe of AXA said: “It is easy to assume living costs decrease as we become less active in our old age but our findings highlight an increasingly expensive later retirement.

“Our analysis has looked at basic living costs, but as we saw recently, the government is proposing that individuals should also be prepared to meet up to £75,000 of care costs if they require it.

“As a nation we are living longer and it’s great that we are able to spend more time in retirement. However, this makes it increasingly important that we plan ahead and consider whether our finances will last us, particularly when our costs might increase in later life.”