Pensioners' income has fallen to an 18-month low with more retired people dipping into their savings to keep afloat, new research has found.
Life and pensions group Aviva said the typical monthly income for the over-55s fell by 6% to £1,216 over the three months to September, the lowest figure since it started its quarterly retirement survey in February 2010.
Worst hit are the over-75s, who receive £999 per month on average, but a quarter of those in retirement survive on less than £750 per month.
Low interest rates on savings and lower savings generally have hit the incomes of all retirees, according to Aviva. Annuity rates - which pay pensioners a set amount every year - have also fallen, something that has especially affected the newly retired. Annuity rates are partly based on UK interest rates, which are at record lows.
Spokesman Clive Bolton said the over-55s have also struggled to keep up with the rising cost of living on a relatively fixed income.
Inflation over the past year has been 4.5%, but many staple items such as food, utility bills and fuel have seen larger increases.
The average amount of savings held by the over-55s fell by 12% from the last quarter to £10,468, a clear indication some people are dipping into their savings, he said, while a quarter had less than £500 saved.
"That almost a quarter of this age group have less than £500 in savings and 40% save nothing is a clear indication that this age group is struggling financially," added Mr Bolton.
Nearly three quarters of the 10,000 pensioners surveyed also identified the rising cost of living as their main concern over the next six months.
A Department for Work and Pensions spokesman said: "We are committed to getting pensioners the support they need in retirement. Our triple guarantee will mean an extra £45 billion for pensioners in the next 15 years. We have also protected key support for pensioners including winter fuel payments and we have tripled the cold weather payments."
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