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Savings for older people have fallen by more than 25% over the past year, while incomes for the over-55s have dropped, according to research by Aviva. One in 10 of the over-55s are surviving on less than £500 a month, with single women most likely to be in poverty, said Aviva in its “Real Retirement Report”, which over the last two years has tracked the income and spending of 11,600 people in, or near, retirement. The average monthly income of the over-55s now stands at £1,285, a small rise on the quarter before, but 4% down from last year.

“With year-on-year inflation running at 5.4%, this actually means the over-55s are even worse off,” said Aviva Director, Clive Bolton. He also warned that although autumn and winter have been relatively mild so far, another cold snap – after 20% rises in heating bills – would hit the worst-off hard. Many pensioners are taking on part-time work in order to meet rising electricity and petrol bills. The number of 65-74 year olds who earn an income from wages, as well as a pension, rose from 18% to 22% over the year.

Others are digging deep into their savings to meet day-to-day costs. Aviva found that the typical person over 55 now has £11,153 in savings and investments, 27% lower than December 2010, when the average was £15,262. One in seven people over 55 have no savings at all, while even those who are saving are putting less aside every month. The typical monthly amount saved fell from £31.17 to £26.90.

Many are still paying off a mortgage well into retirement. Aviva found that one in 10 over-75s have a mortgage, typically around £60,000, “which is worrying as they are less likely to be working and more likely to have a fixed income”. One of the more remarkable findings of the report is that, on average, 65-74 year-olds have higher incomes than 55-64 year olds. Aviva said its quarterly tracking of income levels has found a consistent “retirement bounce” at age 65, when payouts from state and company pensions lift incomes.

The report also highlights deep income inequalities among older people. One in five 55-64 year-olds enjoy incomes over £2,500 a month, or five times the earnings of the bottom tenth. Many are also sitting on properties worth many times their pension. The average person aged over 75 owns a home worth £268,833 – significantly more than the value of the average home in the UK, said by the Halifax to be £161,731.

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