Monday, July 24, 2006
Category:
Consolidation
A recent survey by Prudential UK shows that 1.4 million pensioners are surviving on an income of £5,000 or less a year.
This figure drops to just £3,092 once basic outgoings such as council tax, water and electricity bills have been paid. Retired people who rely on a state pension have just £4,381 a year to live on.
According to Prudential, pensioners are cutting down on everyday spending and are having to go without holidays, leisure activities and eating out. In order to continue living comfortably, some pensioners have resorted to continuing to work full or part time, to using assets and funds intended for family or friends and to borrowing money from the bank. However, over half of the British pensioner population are living on £15,000 or less per year.
Commenting on the survey, Angus Maciver, Prudential UK Director said “Its worrying to think that such a large number of pensioners in this country live on £5,000 or less a year. How many of us could truly say that we could manage on what works out to be just £8.49 a day?”
The figures from Prudential’s long established Retirement Index prove the importance of saving for the future. Angus Maciver commented ‘The earlier you start the more time you have got to save.’ It is also fair to say that the figures highlight the need to clear debt before reaching retirement age as with a reduced income, debts would be difficult to manage.
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People in their thirties and forties might wish to consider taking out a
secured homeowner loan to consolidate debts while still earning, rather than allowing these to continue mounting up to retirement age. It is however important to remember that repaying borrowing over a longer term increases overall interest charges.
