New research has highlighted the worrying predicament facing thousands of retirees reliant on savings and investment funds as their primary source of income.
Despite 59% of retired people stating that they rely on savings to supplement their pensions, around two-thirds claim to have suffered falls in their income over the past two years. On an individual basis, retirees have been hit with an average loss of £2,400 as a result of products yielding poor returns.
Investment products favoured by retired people include Premium Bonds and cash savings accounts, whilst 73% of those questioned said they used cash ISAs as a way to generate income.
Such significant shortfalls in income have forced many people to make changes to their spending habits and cut back on everyday costs such as food shopping and home maintenance.
Rowena Houston, senior investment director at Investec Wealth & Investment, which conducted the research, said: "This research underlines the importance that savings and investments play in supplementing retirement income.
"The last few years of stock market volatility and low interest rates have been particularly unkind to the majority of retired people whose portfolios have been heavily skewed towards safe havens such as cash and government bonds, where returns have failed to keep pace with inflation."
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