Falling returns in the savings and annuity markets now mean that just under a quarter (24%) of people aged 55 and over view their investment funds as a source of income.
According to Aviva'a Real Retirement Report, 38% of people aged between 55 and 64 years old in the UK are currently unable to place any money what-so-ever aside each month, and in many cases are having to raid their savings pots to cope with rising living costs.
Sadly, many people approaching retirement have little choice but to spend all their available funds on bills, groceries and repaying existing debts and have little or nothing to invest.
Just 8% of respondents aged 65 consider inheritance planning as a financial priority, whilst 21% do not anticipate leaving any inheritance behind for their children and grandchildren. These sorry statistics are even more poignant when compared to the 70% of people in the former age group whose finances are restricted to making ends meet, as the cost of living shows little sign of abating.
Debt is an issue amongst many retirees, with a large number using credit cards and loans to tide themselves over. One in four people aged over 75 owe money on their credit cards, whilst 27% of those aged between 55 and 64 still have an average mortgage balance of £70,093 outstanding.
Clive Bolton, managing director of Aviva's At Retirement business, said: "For many people short-term borrowing is a necessary step to manage living costs, deal with unexpected expenses or treat themselves to a holiday.
"But when their daily outgoings are stretched so far by the demands of basic essentials such as housing, food and travel, they can find that regular repayments are difficult to maintain.
"It is important that over-55s view all of the assets available to them holistically, including their housing wealth, to improve their financial freedom," he stated.
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