New research shows that one person in five between the ages of 55 and 64 will be living far below the breadline, after covering their monthly bills from their pensions.
Twenty per cent of pensioners will soon be living on a monthly income of less than £750 a month*.
At the same time, the monthly bills for housing, gas and electricity, travel and clothing will average £490, leaving those worst-off pensioners with just £40 per week for food and other living expenses.
“It is concerning to see that many people may be struggling to get by on such a low income in their later years,” said Aviva director Clive Bolton.
A combination of factors has led to increased impoverishment among pensioners. While a stock market downturn has ravaged returns on pension savings in the last decade, resulting in much smaller average pension pots, the problem has been increased due to a simultaneous drop in annuity rates, which dictate the income available from those pensions savings.
The average pension pot was £103,000 in 2000, but has fallen to just £40,000 today.
“While we often think of retirement as ‘golden years’, the reality is that for a lot of people, the outlook is much bleaker,” Clive Bolton said.
*Source: Aviva Real Retirement Index, February 2010
