OAPs splash­ing the cash? They pre­fer to save it

Daily Mail - - Life - By Rosie Tay­lor Busi­ness Re­porter

A RE­TIRE­MENT spent en­joy­ing cruises, in­dulging in ex­pen­sive din­ners and re­lax­ing at the golf club is more of a myth than a re­al­ity, a report has found.

In­stead of splash­ing the cash, pen­sion­ers cut down on spend­ing and save more – re­gard­less of their in­come.

The in­crease in sav­ing, which hap­pens on av­er­age be­tween the ages of 70 and 74, is driven by re­tirees spend­ing less on nonessen­tials such as eating out, hol­i­days and other recre­ational ac­tiv­i­ties.

It means a house­hold headed by some­one over 80 spends £131 a week less – ex­clud­ing mort­gage costs – than one headed by some­one in their 50s, ac­cord­ing to the In­ter­na­tional Longevity Cen­tre study.

The av­er­age 80-year-old saves around £5,870 a year, while the to­tal an­nual sav­ings of the UK’s pen­sion­ers are around £48.7bil­lion – equiv­a­lent to 2.8 per cent of GDp. Re­tirees spend ‘pro­gres­sively less’ as they get older, with spend­ing drop­ping by 1.4 per cent for ev­ery year the head of the house­hold ages.

The report said: ‘This seems to con­tra­dict the stereo­typ­i­cal im­age of re­tirees splurg­ing in the im­me­di­ate post-re­tire­ment phase of life, go­ing on cruises and spend­ing all their hard­earned cash on fun ac­tiv­i­ties. There does not ap­pear to be a post-re­tire­ment spend­ing boom on leisure and hol­i­days. In fact, from age 50 on­wards, spend­ing on most non- es­sen­tial items be­gins a slow de­cline.’

The report’s au­thors said the drop in spend­ing could be fu­elled by poor health ‘get­ting in the way’ of tak­ing part in ac­tiv­i­ties, par­tic­u­larly among the old­est pen­sion­ers.

Some may use their dis­pos­able in­come to help chil­dren or grand­chil­dren with univer­sity tu­ition fees, debts or get­ting on to the hous­ing lad­der.

The study sug­gested oth­ers may ‘un­der- con­sume’ be­cause they want to leave a be­quest to their fam­i­lies. Most pen­sion­ers had a ‘ high ex­pec­ta­tion’ that they would leave at least £50,000, the report said. But there was also a con­sid­er­able gap be­tween rich and poor pen­sion­ers – with a quar­ter in around £100 a week’s worth of debt, while the rest saved about £145 a week.

Those with sav­ings typ­i­cally kept their cash in a low-in­ter­est cur­rent ac­count.

The ILC is call­ing for ev­ery­one reach­ing the age of 70 to re­ceive a ‘fi­nan­cial health check’ to help them plan. Tim Fas­sam of pru­den­tial UK, which funded the report, said the re­sults were un­ex­pected.

He added: ‘By hav­ing a greater un­der­stand­ing of spend­ing pat­terns in re­tire­ment, the rate at which older peo­ple save and their hopes to leave an in­her­i­tance, it be­comes eas­ier to help them plan for re­tire­ment.’

‘Poor health gets in the way’

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