Pensioners turning to their savings

A third of retired people are being forced to spend savings and cash in investments to bridge a shortfall between their pension income and their expenditure.

The average retired person receives just over 1,400 a month from their pension, but they face outgoings of 1,904, according to asset manager Schroders.

One in four people are able to bridge the gap using money from their partner's pension, while 14 per cent receive extra money from dividends on shares they hold and 21 per cent receive an income from Isa investments.

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But a third of those questioned said they had been forced to tap into savings or cash in investments in to make ends meet.

Among those who have fallen back on savings and investments to cover their living expenses, the average person has spent 6,197 during the past 12 months.

Robin Stoakley, managing director of Schroders' UK Intermediary Business, said: "Rising living costs and the potentially corrosive effects of inflation on annuities means that more people are supplementing their income with other investments."