Over-55s benefit from boosted income and savings
The research revealed growing income among over-55s with the age-group now typically receiving £1,373 a month in income – an extra £151 a month compared to the same time last year (Q1 2013). They are pocketing £216 more compared to two years ago (Q1 2012) when their overall income was £1,157, and £258 more compared to Q1 2011.
Savings and investments are partly behind the boost with both now providing income for a larger number of over-55s. Nearly a third (29%) named this as a source of income compared with 24% at the same time last year (Q1 2013) and 25% for the previous years (Q1 2012 and 2011).
Savings levels have also vastly improved as over-55s seek financial stability. More savers are now putting away more money to protect themselves against the rising cost of living and the fear of having enough money in retirement. The amount of money put away in savings and investments reached a high of £18,632 in Q1 2014 – last reaching near these levels in Q3 2012 when they stood at £17,750.
The 65-74 age group have the largest savings pots at £25,938 compared with £13,158 for the 55-64s and £13,750 for the over 75s. On average, households are putting away £198 a month in savings. A smaller proportion of over-55s than in previous years, do not have any savings but it is still significant at 28%. Monthly saving habits are also improving with those not saving anything down to 9% from a high of 15% in 2011.
The rising cost of living is biting into these savings however, with spending among the over-55s hitting an average of £816 a month – a high point for the Real Retirement Report. Food, fuel and lighting, housing, motoring and entertaining, recreation and holidays are proving the most expensive of monthly purchases. Of these, all except housing (mortgages and rent) have increased on the same time last year (Q1 2013).
The report also revealed that over-55s are now less reliant on borrowing. The level of unsecured debt owed by the over-55s has fallen across credit cards, loans and overdrafts in 2014. Credit card balances have been fluctuating over the years, yet have now fallen to an average of £777 – which has been reducing over time. In total the over-55s owe an average of £2,022 which is slightly higher than this time last year (Q1 2013) at £1,910 but lower than £2,166 in Q1 2012 and £2,370 in Q1 2011.
Property unsurprisingly remains the largest asset for the majority of over-55s with 66% owning their own home outright and 17% owning their home but with an outstanding mortgage. This marks a steady rise in those that are mortgage free. The value of property is the highest since Q1 2011, reflecting the improved housing market and stands at an average £240,641.