Cost of living for pensioners to increase by nearly 150% by 2050

The cost of living after retirement will increase by almost 150 per cent by 2050, according to research published by Royal London.

The Centre of Economics and Business Research (CEBR) provided figures and calculations for the research based on the cost of essential items including housing, food, heating, transport and a few luxuries. These figures showed that the current average monthly expenditure of a pensioner who isn't reliant on the state pension is £1,084 per month, but that by 2050 this will increase by 148 per cent to £2,930 per month.

This forecast means that today's 35 year olds will need to save at least £666,000 to enjoy the same standard of living as today's pensioners. However, the research showed that today's 30-40 year olds have an average pension pot of just £14,000, meaning it's unlikely that they will reach the amount of savings that will be necessary. It is predicted that only one in four people aged 65 or over will be retired in 2050, as many will choose to continue working and save for as long as possible.

A lack of savings can be supported by the state pension, with 20 per cent of pensioners currently living on this alone and 49 per cent relying on it to boost their own savings. The data however showed that 40 per cent of people under the age of 40 predict that there will be no state pension by the time they reach retirement age. If this is the case, then the younger generation will need to save even more to match the potential loss of this.

Unless larger sums are put toward pensions, then many people will find themselves suffering debt and poverty during retirement.