Over-55s facing ‘increased debt pressures’

Rising living costs are leaving many over-55s staring at monthly shortfalls in their finances. 

Research by Aviva has discovered these people are facing an extra month's worth of outgoings as the price of everyday items and bills continues to rise. 

Between December 2012 and January 2014, monthly spending increased from £1,241 to £1,357, which represents a nine per cent rise. For many households, this will have been enough to push them over the financial cliff. 

There has also been a significant increase in essential spending, with food (12 per cent), housing (nine per cent), debt repayments (eight per cent) and fuel and lighting (five per cent) all taking up more of their monthly income than at the end of 2012. 

This demonstrates the severity of the financial situation facing many over-55s, as they are being forced to cope with all of these rises at a time when many are seeing only below-inflation increases in their wages. 

Clive Bolton, Aviva's managing director of At Retirement, said: "Planning for retirement is challenging enough for many people without the added pressure of larger bills for essential costs and the threat of further increases in 2014. While over-55s typically have more income at their disposal than they did a year ago, many are finding they have less freedom to decide what to put their extra money towards, as essential costs rear their heads and push to the front of the queue."

He added people have no power when it comes to deciding the price of essentials, however with the economy improving, some of the pressure they are facing should ease off. 

Some 26 per cent of respondents are worried about their savings returns in the next five years, as many will be left with less money for their post-work lives than they had initially anticipated. 

By James Francis