More retired people see savings dwindle

Published on in Best Bank Accounts by

The combined effects of continued low interest rates and increased cost of living are having detrimental effects on the savings of many retired people in the UK, a new study reveals.

According to the Aviva Real Retirement report, people who are approaching pensionable age have savings which decreased by 33% in less than a year, impacting on their pension plans.

The report reveals that the over 55s have seen their savings fall from £18,364 last September to £11,763 today, and that many are making sacrifices in order to be able to afford the cost of essential day to day items and bills. Energy bills, transport and food costs have all increased and are piling on the pressure.

The historically low interest rates mean that savings are lagging behind inflation and many people are dipping into them to get by. Experts are urging workers to start proper retirement planning to protect themselves and their pensions.

One way to bolster your savings in preparation for your retirement is to compare bank accounts to check you are getting the best rate possible.

The Aviva report also showed that unsecured debt among this age group has risen by 36% in the past two years and the average amount owed on personal loans and credit cards stands at £23,188.

It is those closest to retirement age that have the highest debt. Borrowers aged between 55 and 64 have seen amounts owed on credit cards and personal loans rise by £6,752 in two years.

The average savings pot for this age group is £11,763 and the most significant reduction in savings was seen among those who are in the first decade of retirement, for whom pension pots halved over the past year.

Angela Seymour-Jackson of financial advisers Aegon said that people should act quickly to avoid hardship in the future.

“Younger respondents are more at risk of a retirement crisis than any generation that has gone before. They are increasingly becoming aware that they will have to start planning for the possibility that they will need to support ageing parents, themselves and their children in later life,” she explained.

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