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Retirees’ income battered over past five years

Retirees’ income battered over past five years

Category: Retirement

Updated: 20/06/2013
First Published: 14/05/2013

MONEYFACTS ARCHIVE
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Research by Key Retirement Solutions has revealed the average retiree's investment income has fallen by 34% since the credit crisis took hold in 2008.

This time five years' ago, a typical retired household's saving and retirement income was around £1,863 per year; however, this figure has dropped to £1,207.

Total investment income currently stands at £8.7 billion, down from £13.2 billion in 2008, equating to a £4.6 billion loss, with investment income now accounting for just 5.5% of a retirees' overall income, as opposed to 10% in 2008.

Despite recovering slightly from its lowest level in 2009, when the average individual investment income stood at just £931, these latest figures highlight the extent of the crisis on retirees' finances and suggest there is still some way to go until incomes return to pre-credit crisis levels.

Over the past five years annuity rates have slumped by almost 30%, whilst the cut in base rate to a record low of 0.50% has impacted massively on savings rates and returns.

Dean Mirfin, group director at Key Retirement Solutions, said: "Investment and savings income for retired households has been hammered by the ongoing financial crisis and there appears to be little hope of a revival in the near future.

"The Government's Funding for Lending Scheme is doing a great job for borrowers but savers are suffering and there is little sign of the Bank of England increasing the base rate in the near future," he added.

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