Older Scots fear loss of income as prices rise

One in three Scots aged over 55 fears a fresh deterioration in their quality of life over the next six months as high living costs eat into their income, a report out today reveals.

It also found that one in ten over 55s in Scotland survives on less than £500 a month, while the same proportion have no savings to fall back on.

The Real Retirement report from insurer Aviva comes on the back of 12 months in which over 55s have seen their savings pots slashed by more than a quarter. Low returns from cash accounts have forced more people to raid their savings to cover day-to-day expenses, with the average amount held in savings and investments down 27 per cent since last December.

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A fifth of Scottish over 55s have more than £100,000 in savings – compared with the UK average of 15 per cent – but more than one in ten have no savings at all and a third are unable to put any money away each month. As savings levels diminish, debt problems among over 55s in Scotland continue to rise, according to Aviva. One in four with debts owes money on credit cards and almost a fifth have a personal loan to repay. A fifth still have a mortgage to repay, owing an average of £38,094 (compared with the typical UK mortgage debt of £58,947).

And many fear the situation will get worse over the coming months as the economy threatens to slip into a double-dip recession. A third of Scots over 55 believe their standard of living will deteriorate, 79 per cent of whom are worried about rising prices and a third concerned about their ability to cope with any unexpected expenses.

Clive Bolton, “at-retirement director”, for Aviva said: “Rising costs are real a concern for those on fixed incomes and is a key reason why people need to begin planning their retirement finances as early as possible. However, the typical Scot doesn’t begin actively planning their retirement until the age of 54, later than the national average.

“It follows that at present a high proportion (42 per cent) of Scots aged over 55 still rely on wages or earned income for a large part of their monthly income, as they may be working longer in order to realise their retirement goals.”