Retirees prioritise living costs over inheritance - Retirement - News - Moneyfacts

News

Retirees prioritise living costs over inheritance

Retirees prioritise living costs over inheritance

Category: Retirement

Updated: 29/05/2013
First Published: 29/05/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

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.


What next?

Compare the best savings rates
Annuity service reviews - we asked customers who used the Moneyfacts Annuity Service what they thought of the website and whether we helped them get more income in retirement. Click here to read their testimonials

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

The gender savings gap is widening

There’s a gender gap when it comes to most things in the financial world, and unfortunately, the retirement arena is no different: even though more women than ever before are saving for retirement, the gap between men and women is widening.

The gender savings gap is widening

There’s a gender gap when it comes to most things in the financial world, and unfortunately, the retirement arena is no different: even though more women than ever before are saving for retirement, the gap between men and women is widening.

The gender savings gap is widening

There’s a gender gap when it comes to most things in the financial world, and unfortunately, the retirement arena is no different: even though more women than ever before are saving for retirement, the gap between men and women is widening.
 
Close