Retiring at 55 is Becoming a Luxury of the Past . . .

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According to Aviva's latest Real Retirement Report, the over-55s in theUKare increasingly working past the traditional retirement age as larger numbers fall back on their savings in later life to meet living costs.

Research interviews with more than 14,600 UK consumers aged over 55, between February 2010 and November 2012, informs the Aviva report which examines the financial pressures faced by the UK's three ages of retirement: pre-retirees (55-64s): the retiring (65-74s) and the long-term retired (over 75s).

Average monthly income for the over-55s has increased by just £109 in the last two years. This income boost has been driven by the retiring gaining £166 overall, with more people working past the Default Retirement Age which was phased out in 2011. Whereas monthly incomes have risen by a mere £9 for pre-retirees and fallen by just £1 for the long-term retired, the percentage of the retiring who list wages as part of their income has risen from 18% to 23% in the study period.

The report also shows the growing importance of workplace benefits in retirement.  With the effects of auto-enrolment yet to kick in for future generations, people aged 65-74 (47%) are more likely to draw income from an employer pension than those aged 75 and over (37%).

Monthly spending by theUK's over-55s has actually fallen in the last year, despite annual inflation of 2.74%, with average outgoings of £1,231 in the last quarter of 2012, down from £1,300 in the same period of 2011.

The report suggests that the typical over-55 has cut back on non-essential items and prioritised debt repayment, travel and fuel and light.  Spending on entertainment, recreation and holidays has fallen by 19% in the last quarter, while clothing and footwear has dropped by 13% and leisure goods by 10%.  Meanwhile, spending on debt repayment has increased by 8% and almost matches monthly food bills.

The report indicates that the average saving pot for over-55s has fallen by almost £4,000 in the last quarter of 2012, whilst remaining larger than a year ago. Whilst pre-retirees' savings have reached their highest level since the report began, total savings have decreased among the two older age groups.

The need for the long-term retired to dip into their savings to maintain their standard of living has seen the percentage with less than £2,000 saved grow from 23% to 30%, in the latter part of 2012. In addition, the amount retirees save actually decreased by 28% through 2012. The typical over-55 puts away just £28.67 or 1.99% of their monthly income: a mere £1.77 more than the same time last year.