There was a time when people looked forward to their retirement, but it is now a time of dread for many senior citizens. Whilst mortgage and rental costs are often lower for seniors, the cost of gas, electricity, lighting and food actually goes up. In January 2009 The Institute of Fiscal Studies calculated that the cost of living for pensioners was rising at 5.4% per annum, compared to just 0.5 per cent for other age groups.
A 2009 Prudential survey showed that UK workers are set to receive a retirement income of £17,779 a year in 2009. This figure is £884 less than in 2008. This clearly has a lot to do with falling interest rates and diminishing returns on personal savings. The national average salary is currently £24,908 which means that the average retirement income is 29% less. This drop in income comes when retired people have moretime on their hands and experience a rise in household bills and general outgoings.
It isn't surprising that many seniors have no alternative but to continue working into retirement. Recent research by Lincoln Financial group revealed that 41% of prospective retirees' believe that they will have to continue working on either a full-time or part-time basis. More worryingly, 11% of people don't believe that they will have enough money to last them to the age of 70.
Fuel poverty is a problem for millions of retired people. According to Age Concern, 22% of over-70's are living in fuel poverty compared to only 6% of the population as a whole. The £200 winter fuel payment hasn't really helped to tackle the spiralling costs of gas and electric. Two years ago the winter fuel payment covered 35% of the average gas and electric bill, but it now only covers 20%.
The price of gas and electricity isn't the only bill to have increased. uSwitch.com has announced that the price of water and sewerage will increase by 4.1% in 2009. The Consumer Price index rose to 3.2% in February 2009. The Consumer Price Index is more relevant to retired peoples' lives than the Retail Price Index (RPI) as it excludes council tax and mortgage payments.
Age Concern estimates that £4.6 billion in state benefits remains unclaimed by retired people every year. The Department for Work and Pensions (DWP) estimates that up to 310,000 pensioners fail to claim housing benefit worth £660 million a year alone. This is because elderly people aren't aware that there are benefits in place to help them as many grew up during a time prior to the existence of the welfare state.
Pension credit guarantees that single and married seniors receive a minimum of £124.05 and £189.35 per week, respectively. Disabled people and their carers may also be entitled to carers allowance or full exemption from the payment of council tax. All retired people should verify eligibility as it may be possible to boost income or even claim backdated benefits.
The cost of living is rising at a faster rate for seniors than for other age groups so it is important that all people save as much as possible for their retirement. Anyone that is already retired should check their state benefits entitlement as there is a strong possibility that financial assistance is available.
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