Over-55s forced to tighten their belts as the pandemic keeps them indoors or has them fearing for their financial futures.
Retirees have been forced to cut back their spending due to financial worries about the Covid-19 crisis, research shows.
Retirees have reduced overall spending by 5% this year, and made more extreme cuts across a range of activities as lockdown and health fears limit their plans.
Research by consumer group Which? found leisure spending was down by 13% for retired couples, who also spent 6% less on both European holidays and transport. Spending on groceries and utilities was unchanged.
Single retirees spent 21% less on extended or long-haul holidays and 10% less on European excursions.
They also splashed out much less on recreation and leisure (-14%) and transport (-9%).
Silver spenders’ decisions to cut back does mean their savings will go further.
However, the Which? research also shows retired couples need an average income of £17,000 a year just to cover essentials such as groceries and bills.
For couples seeking a bit more sparkle in retirement the figure rises to £25,000 when leisure activities are added. This rises to as much as £40,000 a year after tax for those who want a “luxury” lifestyle of long-haul holidays and a regular new car.
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Single-person households spend an average 70-75% of that of two-person households, the Which? research found, but only benefit from about half of the state pension entitlement and tax-free allowance of a couple.
This puts the income targets for essential, comfortable and luxury spending for single retirees at £12,000, £19,000 and £30,000, respectively.
Separate recent research by Aviva suggested more than half (58%) of people aged 45-60 are worried they do not have enough money for a decent standard of living in their retirement.
Yet more than a fifth (21%) of non-retired people in this age group are not taking action to boost their retirement income, according to the survey. Only one in 10 people aged 45-60 are planning to up their pension contributions in the future.
More than one in six (17%) said they will need to work for at least six months or more past their retirement date, or cannot see a situation where they can think about retiring.
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Alistair McQueen, head of savings and retirement at Aviva, says: “The high levels of uncertainty caused by the coronavirus pandemic are likely to prompt many people to urgently assess their financial outlook.
“Although uncertainty can be unsettling, people can seek reassurance by taking steps to better understand their current position. Even small, incremental improvements to savings habits can improve long-term prospects and ease financial stress where possible.”
Which? calculations show that once the state pension is factored in, single-person households need private pension income of £5,020 for essentials, £13,635 for a comfortable retirement and £27,395 for a luxurious one.
Couples will need a gross annual income of £3,040 from private pensions to achieve the essential net income target, and £29,790 for a luxury one. They will need £11,040 for a comfortable retirement, requiring a pension pot of £169,000, or £262,500 for a joint life annuity.
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