The rising cost of living has led increasing numbers of over-55s to raid their savings just to keep up with debt repayments, insurer Aviva has warned.
In its wide-ranging Real Retirement Report, the group said that one in four over-75s is also raiding their planned inheritance to support family members.
The research looked at the finances of four groups of British consumers: the 55-64s (pre-retirees), 65-74s (retiring) and over-75s (long-term retired).
It found that while the over-55s' monthly spend has remained static since May 2012 (falling by just £1 to £1,302 in May 2013), they are spending 8% more on their weekly shop and 11% more on public transport fares and other travel costs.
Rising housing costs have also hit those over-55s who still have outstanding mortgages, with monthly housing payments increasing by 6% to £307 since May 2012. Aviva said this suggests that few over-55s have benefited from falling mortgage rates.
Despite the spending rises, the percentage of over-55s in debt fell from 12% to 9% in the year to May 2013. Aviva said the improvement "appears to be fuelled by more people dipping into their savings to clear their debts as they enter retirement rather than maintaining smaller payments from income".
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At £11,763, the over-55s' typical savings in May 2013 are 25% lower than in May 2012. Fewer than one in four (24%) over-55s now count investments and savings as a source of income, compared with 30% in May 2010. The impact of benefit cuts is also apparent, with just 15% receiving an income from this source compared with 22% three years ago.
Clive Bolton, managing director of Aviva's At Retirement business, said: "For many people short-term borrowing is a necessary step to manage living costs, deal with unexpected expenses or treat themselves to a holiday. But when their daily outgoings are stretched so far by the demands of basic essentials such as housing, food and travel, they can find that regular repayments are difficult to maintain.
"It is encouraging to see more people putting more money away as they approach retirement, as savings pots are often relied on to clear existing debts. So as not to erode their savings, it is important that over-55s view all of the assets available to them holistically, including their housing wealth, to improve their financial freedom."
The organisation also said that a quarter of over-75s and more than a fifth of over-55s have given a cash loan to family members instead of leaving an inheritance. The findings also show nearly one in ten over-55s regularly give money to family to avoid inheritance tax (8%), while a further 20% would do the same.