Key Retirement has reported that the the average annual cost of being a pensioner adds up to £10,830 or around £210 a week.
The cost mounts up from spending on the basics such as food, clothes and bills with a weekly £210 needed to get by – nearly 32% more than the full new State Pension of £159.55 a week available for those who qualify.
The national average however masks huge regional variations with pensioners in London needing around £4,700 more a year than pensioners in the North East of England. The average annual cost in London is £13,400 compared with £8,700 in the North East.
Pensioners in the South East of England and East Anglia face annual costs above the UK average while retired people in the South West pay around the national average of £10,830, the data shows.
Key’s analysis shows the average retired household spends around 14% of their cash on housing and fuel – which equates to around £1,500 a year – roughly the same as what is spent on food and non-alcoholic drinks, the equivalent to almost £1,560.
Transport including the cost of running a car eats up 11% of their annual spending – around £1,200 a year. Any spare cash is used for entertainment and eating out with around £1,600 a year of their budget going on leisure spending.
Key highlights how the basic costs pensioners face underlines the need to maximise income from all sources available including property with anyone who relies only on the State Pension facing significant shortfalls. Key’s data shows retired homeowners using equity release plans take an average £73,600 from their homes – enough to fund more than six years of basic spending.
Dean Mirfin, technical director at Keyretirement.com, said: “The basic cost of being a pensioner at around £10,830 a year demonstrates the importance of saving for retirement and generating income on top of State Pensions.
“Over-65s own property worth more than £1 trillion and are literally sitting on spare cash which can be used tax-free to boost their income particularly when inflation is rising and interest rates remain at historic lows.”