Retired households need £429 extra to cover cost of living

MGM Advantage, the retirement income specialist, estimates that the average retired household where the main occupant is aged 65-74 needs to find an extra £429 a year to maintain the standard of living they enjoyed 12 months ago.  The corresponding figure for a home where the main occupant is aged 75 and over is £225.  These are annual increases of 1.89% and 1.53% respectively.  The cost of living for the average home has risen by £670 or 1.85%.  These figures are based on how different households spend their annual budgets and changes to the cost of goods and services between October 2008 and November 2009.

The main areas of expenditure that have seen the biggest increase in cost over the past 12 months include transport (a rise of 6.9%), household goods and services (a rise of 3.5%) and recreation and culture (a rise of 2%).

MGM Advantage estimates that the annual household expenditure for a home where the main occupant is aged 65 - 74 is around £23,107, compared to £14,926 for a household where they are aged 75 and over, and £36,889 for the average home.

Aston Goodey, Sales and Marketing Director, MGM Advantage comments, "Many retired people have had to endure a rise in their cost of living.  This, coupled with the fact that people are generally living longer is placing considerable pressure on retirement income.  All the more reason therefore to shop around for the best annuity, and seek financial advice to ensure you achieve the best possible income in retirement.

"If you are entitled to an enhanced annuity for example, our research shows that, depending on your medical condition, you could on average achieve around 22% more income."