A recent survey has found that an average 11 year old has more disposable income than nearly two million British pensioners, and the savings crisis is helping to create a generation of impoverished retirees.
The insurance company, LV=, released a report that showed 15% of pensioners in the UK have a weekly income of under £154 a week, which once day to day living costs have been subtracted, amounts to just £8 a week to spend on luxury items.
The company are concerned that the situation will continue to decline as more and more over-50s cut back on their pension contributions to pay for everyday essentials.
In its yearly ‘State of Retirement’ report, the company said 12% of people aged over 50 have reduced their retirement savings by around £191 a month on average, as they struggle to keep up with increasing food, energy and petrol prices.
LV= estimate that the over-50s have lost approximately £2.3 billion in retirement savings through reducing their pension contributions.
Head of Pensions for LV= said in an Interview with The Telegraph, “People in their Fifties are saying they cannot afford to save as much as they would like to.
He went on to say that there would be a “generation of pension paupers” over the next ten years as many pensioners find they don’t have enough savings to live a comfortable retirement. He voiced concerned that millions of pensioners were now in a position where their young school-aged grandchildren have more disposable income than them.
The ‘State of Retirement’ survey found that two-thirds of pensioners were having to use various different techniques to save money and stretch their finances further.
Nearly half of the pensioners surveyed regularly collected money saving vouchers and coupons, 41% were entering competitions on a regular basis and 29% said they looked in the press and on the internet for ways of getting free samples of products.
The report also mentions that many over-50s had been forced to downgrade their retirement expectations, with 25% saying they felt they would have to continue working past the state pension age because their retirement savings were inadequate.
There are currently approximately 2.3 million people (over a quarter) in the UK who are aged 50 and over who do not have any retirement savings at all.
More women than men are likely to be without a company or private pension policy, with more than a third of over-50s females not saving for their retirement.