Retirement savings have plummeted among those aged 55-64 over the past year as the cost of living continues to rise, according to Aviva’s latest Real Retirement Report.

The report assesses the impact of financial pressures and concerns across the UK’s three ages of retirement: the 55-64s (pre-retirees), 65-74s (retiring) and over-75s (long-term retired).

Savings habits have tailed off

Savings habits among those nearing retirement have tailed off in the last year, leaving 40% of 55-64s – over 2.9 million according to the latest population estimates[1]. The trend sets pre-retirees apart from both older age groups, who have succeeded in increasing their monthly savings habits in the last twelve months.
Pre-retirees have been rendered even more vulnerable by a 22% drop in their average savings pot over the last year. One in five 55-64s – almost 1.5m people – have no savings or investments to fall back on while almost one in three has less than £500 (30%).

Financial preparations for the future

As everyday living costs continue to rise, it is vital that you make sufficient financial preparations for the future, as any unexpected expenses that come your way could have a serious impact on your finances if you don’t have savings to dip into.

It is therefore particularly alarming to see the slump in savings habits among those who are nearing retirement. Putting away even a small amount each month can make a real difference if you start early enough.

Source:
[1] Office for National Statistics, mid-2012 population estimates published on 8 August 2013 show there are 7,308,618 people in the UK aged 55 to 64. The Real Retirement Report was designed and produced by Wriglesworth Research. As part of this, more than 17,686 UK consumers aged over 55 were interviewed between February 2010 and October 2013. Wherever possible, the same data parameters have been used for analysis but some additions or changes have been made as other tracking topics become apparent.