Pensioners have less to spend than an 11-year-old
And things are getting worse.
'Pocket money'The figures emerged in the annual LV= State of Retirement report. Ray Chinn, LV= Head Of Pensions, said: "It's truly worrying that decades after leaving their childhoods, millions of retired adults now find themselves back in a situation where their weekly spending power amounts to what is essentially pocket money."
The report also found that some 61% of retirees are so short of cash that they have to be creative about saving money. Some 49% use vouchers during their weekly food shop, 29% apply for free samples of food and sundries and 41% enter competitions in the hope that a prize will help ease their budget strain.
Getting worseBut while today's retirees may think they are suffering enough, it's nothing to the financial pain which is likely to be felt by those approaching retirement with no savings and only the basic state pension to rely on. There are an estimated 2.3 million people over the age of 50 in this position - which makes up around 27% of the over 50s working population.
Even with the introduction of a new higher flat rate pension of £144 per week in 2016, millions of men and women will face an income that already falls short of typical monthly expenses. It means they would not have any disposable income at all - compared to the £214 minimum that they say they will need in order to have the retirement they expect.
Chinn says: "The next generation of retirees will be in such a precarious financial position that many will struggle to cover the cost of their essential weekly expenses, let alone having anything left to enjoy their retirement with. Putting away enough for a comfortable life after work is not easy, but we would urge people to plan ahead in order avoid a future where they might be less wealthy than an 11-year-old. Even for today's over-50s rapidly approaching retirement, it's never too late to make a difference."
CutbacksThe report also showed that even those who are saving for retirement could be in for a nasty shock, as they have drastically cut back their contributions. In the last year, a collective £2.3 billion of contributions have been cut, with 12% of working people over the age of 50 among those who have cut their long-term saving, by an average of £191.36 a month.
Chinn said: "In the face of rising living costs and numerous other financial pressures, many over-50s are making cutbacks to their retirement savings, in order to maintain their lifestyles in the here and now. "
What can you do?Faced with the misery of a retirement in poverty, many are changing their plans. Almost a third (31%) of those over 50 have had to change their retirement plans, and resign themselves to working longer than they had initially planned.
Over a fifth (22%) will work past the state retirement age because they will be forced into it, and 28% have no idea when they will be able to afford to retire. It's not all bad news though: 27% of the over 50s will work past state pension age, not because they have to, but because they enjoy it and they're not ready to put their feet up just yet.
However, Chinn adds that working longer isn't the only other option. He says that 70% of people have never had any advice on retirement planning, and that speaking to an expert can open up new ways of making investments grow, possible sources of income, and creative solutions to any potential shortfalls.
He says: "Choices in retirement have grown considerably in recent years. By seeking professional counsel and understanding all of the ways and means of maximising savings and retirement income, people can come to a situation where they may not need to make such deep cuts."
Because while we may want to bury our heads in the sand and pretend that we're never going to grow older, clearly this is going to leave us with the same kind of spending power as an 11-year-old. And nobody wants to be stuck in the kind of retirement where a 10p chocolate bar and a can of fizzy pop is considered the height of hedonistic indulgence.