Annual average household expenditure is estimated to be £35,978. The corresponding figure for a household where the main occupant is 65 – 74 is £23,711 and £15,139 where they are aged 75 and over17-01-2012
Despite the latest annual CPI inflation rate falling to 4.2%, MGM Advantage, the retirement income specialist, estimates that collectively UK households still need to find an extra £38 billion1 to maintain the same standard of living enjoyed 12 months ago. For households where the main occupant is aged 65 -74, the corresponding figure is £3.27 billion and where they are aged 75 and over, it is £2.15 billion. To maintain the same living standards as a year ago, the UK would need to spend an estimated additional £611 per person.
MGM Advantage estimates that a typical UK household would need to spend an extra £1,469 a year to maintain their standard of living from a year ago. The corresponding figure for households where the main occupant is aged 65-74 is £955, and for older households it is £610.
Aston Goodey, Sales and Marketing Director, MGM Advantage comments: “Inflation continues to have a significant impact on the finances of retired people. Given the fact that people are living longer and their retirement incomes are shrinking, many more people face an uncertain future.
“We are seeing more interest in alternative retirement income solutions that can provide some protection against inflation and the rising cost of living. Our Flexible Income Annuity is growing in popularity as it offers the potential for investment growth, as more people recognise the need to mitigate against the impact of both rising inflation and falling annuity rates.”
MGM Advantage recently published a report: Our Retirement Nation which revealed that on average, those in retirement felt they needed an extra £98 per week3 to feel comfortable about their finances. The report showed that a lack of money was the biggest worry in retirement with 40%3 of respondents citing this option.