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Almost a quarter of over-55s survive on £24 a day

27 September 2011

Almost a quarter of over-55s are surviving on just £24 per day, Aviva's latest Real Retirement Report highlights. 

Aviva's quarter three report shines a spotlight on retirement finances, revealing that 23 per cent of over-55s live on an income of just £750 per month.  This income needs to stretch to cover all outgoings including rising utility bills, council tax, motoring expenses, recreational spending, and in some cases a mortgage.  Around seven per cent of over-75s still have a mortgage, with the average mortgage debt standing at £46,873. 

Worsening situation
Aviva's report as a whole paints a bleak picture of retirement finances compared to their previous report.  Their quarter two report saw savings rise and debts fall for the over-55s.  Quarter three figures show the average savings held by over-55s has fallen by 12 per cent to under £10,500.  Worryingly, a quarter of over-55s have less than £500 in savings and 46 per cent of 55-64 year olds save nothing each month.   For those over-55s with debts the new figures are also bad, with the average debt rising from £17,112 in May 2011 to £20,001 in September 2011.

Cutting back
The over-55s are responding to low incomes and rising debt by cutting back on food shopping.  The percentage of income spent on food has fallen significantly to just 15 per cent, compared to 23 per cent this time last year.  As spending on groceries was cut, debt repayment increased by two per cent since June 2011, showing that cut backs are often made with the ultimate aim of stabilising finances.

Sitting on a fortune?
As many over-55s struggle with depleted savings, rising living costs and small incomes, the answer may lie close to home.  Key's property price index showed that over-65 homeowners are sitting on £752bn worth of property owned outright.  The money tied up in property could help ease financial strains felt in retirement.  Downsizing is one option, but it isn't always right for everyone.  In fact, SHIP have highlighted that in 32 per cent of cases those who downsize would either be worse off or unable to release sufficient funds to make it worthwhile once costs are taken into account.

Another option to consider is equity release.  Using an equity release plan, you can unlock tax free money from your home; money which can help to top up a low income, pay off your outstanding mortgage and ease the financial strain of day to day expenses.  Think carefully before securing other debts against your home. 

Why not use our free online calculator to see how much you could release?  You can find out more about equity release by calling 0800 531 6027 and arranging a free appointment in the comfort of your own home.  Lines are open Monday - Friday, 9am - 5.30pm.  During your appointment, you will hear about the different types of equity release schemes, the exclusive offers available to you and how all plans reduce the value of your estate and may affect your entitlement to state benefits. 

This is an equity release plan. To understand the features and risks ask for a personalised illustration. Key's typical fee is 1.65% of the amount released, payable only on completion of the plan.

Page last updated: Thursday 13 June 2019