However, some age groups are struggling financially due to significant pressure from unsecured and secured debt, according to Aviva's latest Real Retirement Report.
Overall savings pots increase driven by improvements for the retiring:
The UK's over-55s saw their total savings increase over the last quarter, with the typical pot rising from £14,198 (Q1 2012) to £15,756 (Q2 2012). The main driver behind this is increases in the saving pots of the retiring (65-74) rather than the pre-retirees (55-64) or long-term retired (over-75s). Those aged 65-74 have benefitted from the removal of the default retirement age (DRA), allowing retirees to work longer. In addition, this age group have typically boosted their savings with a lump sum from their annuities, choosing to save this money for later life rather than spend it.
The 55-64 and over 75 year old groups have actually seen pots fall, with the over-75s seeing their savings pots whittled down from £22,500 (Q2 2010) to £12,998 (Q2 2012) as they dip into their capital to boost their income in order to meet rising costs.
Those aged 55-64 have also fared badly and seen their savings fall from £11,176 (Q2 2010) to £9,373 (Q2 2012) as they face saving for retirement, meeting day-to-day costs, and often assisting family members financially.
Monthly savings fall:
At the same time, the typical amount put away each month by all over-55s has fallen considerably over the last quarter from £39.97 (Q1 2012) to £31.05 (Q2 2012). Those who started off the year with the resolution to save more may have found the pressure of everyday costs has prevented them from saving as much as they would have liked.
It is interesting to note that while they typically save the most each month the over-75s are seeing their overall pots fall the most thus suggesting that while they start each month by putting away money, they dip into it and their capital by the end of the month.
Incomes continue to rise:
The typical monthly income of the UK's over-55s has increased by 4% since the start of the year (£1,303 - Q1 2012) and now stands at £1,361 (Q2 2012). The increase is partly driven by the rise in the number of older people who are claiming their State pension while continuing to work - even part-time.
Official figures show the numbers still working had increased from 7.6% in 1993 to 12% in 2011, something which is likely to still be increasing since the recent end to the DRA.
However, while incomes continue an upward trend (+6% since Q4 2011 - £1,285) in real terms it is an increase of just £122 per month since the reports began tracking this (February 2010 - £1,239). Furthermore, one in ten (10%) over-55s rely upon an income of less than £500 per month (Q2 2012).
Borrowing increases:
The typical over-55 with unsecured debts owes £22,401 (Q2 2012), which is down from £24,827 (Q1 2012). This fall could be the result of paying down debts that have been incurred over the Christmas period but this is still 31% higher than at the same point last year (Q2 - £17,112). Those aged 65-74 currently owe the most (£24,707), followed by pre-retirees £23,565, and the long-term retired (£11,811). In addition, 17% of over-55s are still paying off a mortgage, with the typical amount owed standing at £63,555 (Q2 2012).
Clive Bolton, at retirement director of Aviva comments:
"The overall fortunes of the UK's over-55s are on an upward curve with both incomes and savings increasing. However, when you look at the individual age groups, you find that much of this improvement is driven by the retiring (65 - 74) rather than the long-term retired (over-75s) and the pre-retirees (65-74).
"With the average amount saved each month falling over the course of the year and the average debt held almost a third (31%) higher than at this point last year, it is clear that there are some who are still struggling with financial pressures.
"As incomes increase and with over-55s' inflation easing back to 3.21% (May - Q2 2012), this is a good opportunity for people to boost their savings and try to pay down their debts. The more people can do to secure their retirement income before they stop working, the more prepared they will be to meet the expenses they encounter during their later years."
