Utility bills added to the cost of running a home will overtake the income of UK pensioners within fifteen years, new research indicates.
A report entitled ‘Cost of a home in retirement,’ compiled by Datamonitor and commissioned by Prudential has found while utility bills - including Council tax, water and rising energy prices - will increase by 5% per year until 2010, doubling by 2020, the interest on income per retirement household will only grow at 4% each year, with disposable income increasing from £13,142 to £16,629 in 2010.
Ali Crossley, director for Prudential’s Lifetime Mortgages says: “The cost of running a home in retirement will take up more and more of pensioners’ disposable income. Today, necessities account for 12.3% of their income. By 2020 it will be 13.5%.”
Prudential adds four out of ten retired property owners will need to redecorate within the next five years and with the average cost of home improvements within that time at £3,045, a total cost of running a home will exceed £12,500 by 2010.
Crossley adds: “Most people hope that their retirement will be a time to enjoy their hard-earned cash in the home that they know and love. But it is getting more expensive to maintain the same basic standard of living in retirement, let alone think about home improvement or other luxuries.
Last month, a report compiled by UK pension specialist Key Retirement Solutions (KRS), found that the cost of sustaining a living for retired people had increased 45% over the past decade and is nearly double the average pensioners income.IFAonline
'Right thing to do'
£69m spent on upgrades
European fintech market 'underserved'