The inaugural Retirement Lifestyle Report by wealth manager Quilter and the Centre for Economics and Business Research shows UK retirees are spending an average of around £22,000 a year. This includes an average of £2,500 on gifting to loved ones.
The research, based on a survey of 5,001 UK retirees, provides the first-ever annual snapshot of real-life retirement spending, broken down by age, gender, region, income level, and relationship status.
Holidays, groceries, and housing are the biggest areas of retirement spending – holidays and home renovations are the highest areas of discretionary spending for retirees at £2,137.34 and £1,985.26, respectively, but debt repayments and gifting to relatives are also significant.
The research illustrates how important retiree income is to the wider UK population. The average retiree gifts £1,323 to relatives each year and provides a further £1,175 in assistance to fund education for their grandchildren or other relatives. This represents over 10% of their annual spending.
The median retiree household income is £35,000. However, income is not evenly spread across genders and regions. Two-fifths (42%) of retirees in Wales, for example, report an income below £30,000, compared with an average of over £58,000 in London. This leaves many retirees with very little room to save or cover unexpected expenses after meeting their regular outgoings.ngs
Even after they have finished working, the average retiree spends more than £1,500 annually to pay down debt, although this figure declines with age.
Quilter’s research also shows that the State Pension remains a critical source of income. Among those aged 70-74, the State Pension makes up 47% of household income, jumping to 50% for those aged 80-84.
Retirees aren’t just budgeting for themselves; they’re quietly propping up the next generation, too, said Steven Levin (CEO of Quilter).
“With nearly £2,500 a year being gifted to family and to help with the education of loved ones, it’s clear many are playing a bigger economic role than they’re often given credit for.
“That’s on top of rising living costs, ongoing debt repayments, and increasing concerns about the future. These aren’t luxury years; they’re active financial years, and planning needs to reflect that.
“It is clear from our research that, despite the stereotype of the cash-rich Baby Boomer, too many people are over-reliant on the state pension to make ends meet. Also, too few are taking financial advice, despite the significant benefits seen by recipients.”
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