4.5m retirees ‘worried about financial situation’

Some 4.5 million retirees are struggling to make ends meet as their financial situation continues to worsen.

With household bills rising and pensions only increasing with inflation, many individuals are not able to enjoy their post-work life. Now research by MGM Advantage has found just how severe the situation is for some older consumers, as 41 per cent have been forced to cut back on their spending in the past 12 months.

On top of this, 27 per cent are rationing their energy use, which is particularly concerning. Older people are more susceptible to sickness from the cold and so they should not be forced to choose when to use heating. 

When it comes to making savings, 23 per cent have cut back on their food shopping, 26 per cent are going on fewer holidays and 25 per cent are eating out less in an effort to get by.

Retirees are struggling

This demonstrates the precarious position facing many over-65s, as they are being forced to make hard decisions about money, or else they will end up with significant debts that will be very hard to service. 

Andrew Tully, pensions technical director at MGM Advantage, said: "We are in the midst of a cost of living crisis and this shows no sign of going away. Times are tough, but retirees are resilient people. [However], these figures highlight the perilous state many find themselves in, cutting back on essentials like food and heating to make ends meet.

"Retirees find it particularly tough as they face the double whammy of a typically fixed pension income and currently low returns on their savings. They also spend a disproportionate amount of that income on the essentials to live compared to other groups."

Ingenuity in action

Recognising the situation they find themselves in, many retirees are showing ingenuity when it comes to making their finances stretch further. One-third have changed their shopping habits, either turning to discount stores or cutting back on the number of journeys they take. 

As well as this, 14 per cent have delayed replacing their car, while 15 per cent are using public transport more often or walking – public transport is free for over-65s. Some 13 per cent are even using auction sites to generate additional cash.

Retirement worries

It is not the first time the stark situation facing retirees in the UK has been shown. Last year, a study by Engage Mutual discovered 60 per cent of people coming up to retirement age are very worried about their financial prospects. More than half (54 per cent) do not know how they will pay for any unexpected bills or costs.

This is reflected in the fact that in 2013 the number of people aged 65 and over in employment reached one million for the first time, as these individuals realise they don't have enough money to stop working. 

However, the easiest way to avoid this situation is for Britons to bring their finances under control when they are of working age, as this way they will not need to worry when they finally down tools.

By James Francis