How much does it cost each year to be a pensioner?
According to new research from Key Retirement Solutions, the average annual expenditure of an over-65 household is £10,387.
This covers average essential expenditure such as food and fuel.
It is of course an average figure.
The figure is £3,100 a year lower in Wales than in the South East, for example, where pensioners face average living costs of close to £12,000 a year to cover the essentials.
Based on a flat rate State pension of £7,700 a year, this research tells us that UK pensioners face an average shortfall of £2,700.
Much higher than this if you live in London or the South East.
This is different for everyone.
The amount you spend in retirement and the amount you will have to spend in retirement will depend on your chosen lifestyle and your sources of capital and income in later life.
Also be aware that your spending patterns are very likely to change during your retirement.
We often find that our clients experience distinct stages of retirement; everything from a more expensive ‘active’ stage in the earlier years, to a lower cost of living in later retirement, before facing big bills (often funded from the sale of property) to cover residential care fees.
No two retirement experiences are the same when it comes to their costs and sources of funding.
Understanding what the averages look like is of some help when setting a retirement budget, but to get a really good handle on things it is essential to sit down with a Financial Planner, go through a lifetime cash flow forecasting exercise and find your own number.
