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Over 55s concerned about rising living costs

Over 55s concerned about rising living costs

Category: Pensions

Updated: 08/12/2010
First Published: 08/12/2010

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 It is now over 6 months old so the content may be out of date.

Over 55s are increasingly worried about the rising costs of living, with many making changes to their spending habits as a result.

There has been a significant increase in over 55s' fears about the rising cost of living, with three quarters admitting it is their biggest worry over the next six months, according to Aviva.

Some seven in ten people aged 55 and over said it was the thing they feared most over the next five years.

The huge upturn in the number of people worried about living costs – those saying it is their biggest concern has increased by 52% in the last six months alone – has been caused by the Government's austerity measures and the impending VAT rise.

Whilst the over-55s' biggest fear is the rising cost of living (74%), over the next six months, they are also concerned about the falling return on savings (35%), unexpected expenses (36%) and an increase in taxes (26%).

The financial concerns of this age group centre on the fear that their already squeezed incomes will fall further and they will be forced to pay for additional expenses out of this money.

Housing (mortgage or rent) now makes up the largest share of the over-55s' monthly outgoings, accounting for 18% of total expenditure (compared to 14% in September 2010).

This is likely to be due to a variety of reasons, from landlords increasing rents, to people choosing to pay down their mortgage in the current low interest environment.

"Over the last six months, we have seen a significant increase in the number of over-55s who are worried about the rising cost of living," Clive Bolton, 'at retirement' director at Aviva, said.

"Inflationary pressures have become stronger over this period, whilst interest rates have remained at historically low levels. The Government's Emergency Budget and Autumn Comprehensive Spending Review have also left this age group feeling nervous that they will receive less support from the State.

"However, we have seen the over-55s make steps to adjust their spending accordingly, which is encouraging."

With concerns over the cost of living, it is more important than ever to research and analyse your options before choosing an annuity in which to invest your pension pot.

The easiest way to find the best annuity deals is to take a look at our annuity best buy charts or use an online annuity planner service such as that offered by Premier Retirement Services.

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