UK pensioners are saving for their supper

Almost a quarter of pensioners with an ISA are dipping-in to their hard earned savings simply to afford to live, according to research by Skipton Building Society.

The findings emerged in a detailed study of 2004 people from across the UK aged 50 and above. It revealed a staggering 40% admitted withdrawing from their ISA to pay for heating and electricity bills, food shopping, and to supplement their pension.
 
However one in three admitted when they opened their ISA they wanted to put the money aside and never touch it. 46% said the main reason they originally saved into their ISA was to save for their future.
 
Stacey Stothard, Corporate Communications Manager at Skipton Building Society, said: "Despite reaching an age where people expect them to be financially more comfortable, people approaching and living through retirement are increasingly finding the opposite.
 
"They have made wise choices in taking advantage of tax-free savings, putting their well earned money in to ISA accounts. And many have built up a tidy nest egg of tax-free savings. But they are now finding that the cost of living has sadly increased too - so much so, that they're having to withdraw their savings simply to afford to live."
 
The study shows that one in three respondents have contributed to a cash ISA account for over a decade. And over half of pensioners surveyed said they now only made occasional deposits into their ISA of whatever they can afford throughout the year.
 
But when asked if they had withdrawn from their ISA, 45% of respondents said yes. This rises to 51% of those aged 50-59 years.
 
The poll shows that when it comes to withdrawing money from their ISA, one in ten people aged over 70 cited they needed the money to supplement their pension.
 
Stacey added:  "Instead of being rewarded for saving over the years, many people now have little option but to start draining down their ISA balances, just to get by. At a time when younger members of the family are feeling the squeeze so too are their parents, who are facing the prospect of reduced retirement income and financial uncertainty.
 
"While there are factors out of their control, one step people can take to really make the most of their savings is to have a comprehensive savings portfolio. By having several types of savings accounts for the short, medium and longer term, they can hopefully build up their balances in a way that suits their individual ambitions and needs."