Over 65? Watch out as that income slides

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Average incomes drop 24 per cent for people aged 65 and over compared to those aged 55 to 64, according to new research from a retirement income specialist.

The nationwide research shows average weekly income for people aged 55 to 64 is around £318 a week after housing costs and tax – the equivalent of £16,532 a year.

But for the over-65s average weekly income drops nearly a quarter to around £242 a week – the equivalent to £12,586 a year.

And the income figure for over-65s is an average – around a third say their weekly income after tax and housing costs is less than £150 a week while six per cent admit it is £50 a week or less.

However, it is not all gloom – one in eight over-65s say they have a weekly income of more than £400 a week after tax and housing costs.

Primetime Retirement says the research highlights the income precipice facing many people in retirement - and the need for increased flexibility and innovation in retirement income solutions.

Marketing director Stuart Wilson said: “There is a serious reality gap between the incomes people believe they will have in retirement and the incomes they actually achieve.

“Very few people who are working would be able to comfortably absorb a 24 per cent income cut, even if certain outgoings such as mortgage repayments have gone, but that is the unfortunate reality for many in retirement. What makes the situation worse is that most are on fixed incomes with no prospect of income increasing.

“Keeping your options open and retaining some flexibility in retirement is an excellent first step to maximising income throughout retirement.”