Retirees look to continue work as cost of retirement rises
The average annual cost of living in retirement has grown to £11,200 as of 2015, up 8% compared to 2014.
However, this varies significantly from region to region. In London and the South East someone might face costs of about £13,000 per year, while retirees in the North East would only need to cover costs of £9,630.
It may come as no surprise then that separate research by Prudential found that more than half (51%) of those due to retire this year are considering working beyond the state pension age to help improve their financial position.
Instead, many are looking at their options to go part-time, change jobs or delay retirement altogether.
According to analysis of figures from the Office for National Statistics analysed by retirement advice specialist Key Retirement, the largest chunks of retirees' annual budgets go towards fuel and housing (15% or £1,680 annually) and food and non-alcoholic drinks (14% or £1,568). Transport takes up an additional 11%.
Fuel and housing expenses have increased by an average of £200 over the course of the past year. Keep in mind however that the figures vary from one region to another, so dramatic price changes in one place - notably London - might drag the average higher for the UK as a whole.
Dean Mirfin, group director at Key Retirement, says: "The recent good news on price rises slowing down as inflation falls, as well as cuts to major expenses such as gas and electricity bills and the fall in petrol and diesel costs, should mean a drop in the cost of being a pensioner this year.
"But it is crucial that pensioners and those in the run-up to retirement focus on their retirement income as the current basic state pension, and even the new state pension planned for next year, will not cover the basic costs of being retired in any region of the UK."
According to Prudential, a quarter of people who were previously scheduled to retire this year have decided to delay their plans. One fifth of people who do plan to retire this year feel hesitant, and are not sure if they are ready to stop working completely.
Stan Russell, retirement income expert at Prudential, says: "The old image of everyone giving up work aged 60 or 65 and becoming a pensioner is a thing of the past."
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This article was written for our sister website Money Observer
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).