Time to tap the rainy day savings as 70% of pensioners cut back on fuel
20th February 2023 13:20
by Jemma Jackson from interactive investor
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interactive investor comments on ONS data on the impact of the increased cost of living.
ONS data on the impact of the increased cost of living on adults across Great Britain: September 2022 to January 2023, reveals that the cost-of-living crisis is biting hard, with 94% of adults experiencing an increase in their cost of living compared to last year.
72% of adults aged 55 to 64 years, and 70% of 65 to 74 years reported cutting down on fuel and heating their homes, compared with 40% of those aged 16 to 24 years.
Renters are experiencing higher costs with 55% of renters unable to afford an unexpected bill of £850, compared with 12% of outright homeowners.
Younger householders and parents are also more likely to be facing hardship with 34% of adults aged 25 to 34 years reporting borrowing more money or using more credit than usual compared with a year ago, against 7% of those aged 75 years and over. Likewise, 54% of parents with dependent children report not being able to save, compared with 42% of non-parents.
The ability to save is also impacted by personal wealth with 56% of adults earning between £10,000 to £15,000 unable to save, compared with 24% of those earning £50,000 or more.
Alice Guy, Personal Finance Editor, interactive investor, says: “One concerning surprise is that 70% of pensioners are cutting back on heating their homes. This contrasts with figures showing that 56% of those over 75 reported still being able to afford to save this year.
“It seems likely that even pensioners with savings may be cutting back on fuel, not wanting to dip into their retirement savings. Pensioners have often saved up for years to have enough for retirement and may be reluctant to dip into their savings pot. Thankfully, it’s likely that fuel costs will drop before next winter.
“The cost-of-living crisis is not hitting us all equally. Many renters are facing a precarious financial future, with not enough money to cover an unexpected bill of £850, whereas homeowners’ finances are much more resilient, with only 12% of those who’ve paid off their mortgage struggling to pay a big bill.
“It’s doubly hard for poorer families who are facing spiralling costs, with little financial wiggle room to save up and give themselves some breathing space. If you find yourself facing financial hardship, then it’s important to reach out and get help. Charities such as Citizens Advice and StepChange can help review your finances, suggest ways to pay off your debts and get your finances back on track.”
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