40% of over-60s have poor or very poor financial resilience, according to the latest findings of the HL Savings and Resilience Barometer.
Only the 20-29 age group fared worse (46%), while the 40-49 age group fared best (27%).
44% of the over 60s had financial resilience that could be described as good or great. This compares to 37% of those aged 20-29 and 56% of those aged 40-49.
Hargreaves Lansdown said that at a time when money is already tight, soaring inflation has increased the amount needed for a moderate retirement income (from £20,800 to £23,300) putting those close to retirement under increased pressure.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Rampant inflation is running away with our retirements as soaring costs lay waste to our savings and leave us less able to plan for the future. The over 60s are in particularly bad shape – 40% of households had financial resilience that could be described as poor or very poor. Only the 20-29 age group fared worse but it’s to be hoped this group have time to repair their finances – the over 60s are rapidly running out of time.
“Soaring price rises have pushed up our cost of living leaving us with less to put aside for our savings and long-term planning. This impacts everything from the amount of money we have left at the end of the month, to how much we save and how much we contribute to our pensions. When it comes to retirement the Pensions and Lifetime Savings Association recently said the cost of a moderate retirement had increased by almost 20% from £20,800 to £23,300 per year which hikes the amount we need in our pensions to sustain this lifestyle. Even the blockbusting £10.1% increase in state pension we saw in April is barely making a dent.
“This has an impact on our long-term financial resilience with only 38% of over 60s households now on track for a moderate retirement compared to 40% this time last year. As a comparator 46% of the 40–49-year age group were on track though this has also fallen from 48% last year.
“The cost-of-living crisis has laid waste to our finances and with inflation proving stubborn there is no end in sight any time soon. Older people may face difficult decisions about their retirement -such as working longer or finding part-time work to help them make ends meet.”