65% of retirees are worried about the rising cost of energy bills compared to 55% of UK adults
Research from our Wealth and Wellbeing Research Programme* found that around two thirds of people in retirement, that’s about 8m pensioners, are worried about the sharp rise in energy costs.
Retirees are more likely to be on a fixed income, which will be impacted by rising inflation. As the purchasing power of their pension savings fall, retired people have seen living costs rise. Earlier this year, our research found that retired people had seen their living costs rise on average by £163 a month. This equates to £2,000 a year.
Women were found to be receiving less from their pensions compared to men, which could make it harder for female retirees living alone to manage inflated bills.
Retirees drawing an income from their pensions may be forced to make greater withdrawals than they initially planned. As the funds have less time to recover, taking out a larger income from their savings could risk running out of money depending on the growth rate of their pension. The table below shows how a £200,000 pension fund could last 28 years if £12,000 a year is withdrawn, or 15 years if £18,000 a year is withdrawn. (Figures assume 4% growth rate)
The table below shows the impact of income withdrawal on a pension fund, and how long the fund will last.
|How long will a £200,000 pension fund last?|
|Annual growth rate||Number of years before pensions run out|
Retirees with larger pension pots (those with assets of between £100,000 and £500,000 excluding property) are more insulated from the extreme effects of the cost of living crisis. They are more likely to have paid off their mortgages and accumulated healthier savings over time. About 60% of retirees said they can comfortably afford their day-to-day costs compared to 36% of those aged between 35 and 54.
The pressure of paying higher bills on a fixed income has forced some retirees to revisit working life. According to our research, 291,000 (2%) of over 65 year olds have returned to work because of the cost of living while 517,000 (4%) are now looking for work due to the cost of living. Almost half (49%) of retirees said that they are receiving less than £1,000 per month from their pensions, making it difficult to maintain their lifestyle.
You can read more about the Government’s support on the 'Help for Households’ website
* The LV= Wealth and Wellbeing Research Programme is a quarterly survey of 4,000 UK adults to understand UK consumers and their attitudes to their personal finances and wellbeing. The statistics shown here are as a result of the survey we conducted in September 2022.
View the 10th edition of the LV= Wealth and Wellbeing Research Programme