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AVERAGE RETIRED HOUSEHOLD NEEDS TO FIND UP TO £429 EXTRA A YEAR TO COVER AN INCREASE IN THEIR COST OF LIVING*

 

• Annual average household expenditure is estimated to be £36,888.  The corresponding figure for a household where the main occupant is 65 – 74 is £23,106 and £14,926 where they are aged 75 and over*

March 2010 - MGM Advantage, the retirement income specialist, estimates that the average retired household where the main occupant is aged 65-74 needs to find an extra £429 a year to maintain the standard of living they enjoyed 12 months ago*.  The corresponding figure for a home where the main occupant is aged 75 and over is £225.  These are annual increases of 1.89% and 1.53% respectively.  The cost of living for the average home has risen by £670 or 1.85%.  These figures are based on how different households spend their annual budgets and changes to the cost of goods and services between October 2008 and November 2009.

The main areas of expenditure that have seen the biggest increase in cost over the past 12 months include transport (a rise of 6.9%), household goods and services (a rise of 3.5%) and recreation and culture (a rise of 2%).**

MGM Advantage estimates that the annual household expenditure for a home where the main occupant is aged 65 – 74 is around £23,107, compared to £14,926 for a household where they are aged 75 and over, and £36,889 for the average home.*

Commodity or service	Estimated expenditure (£)
	65-74	75 and over	All households
Food & non-alcoholic drinks	3216.18	2233.69	3668.93
Alcoholic drinks, tobacco & narcotics	710.96	307.23	756.97
Clothing & Footwear	849.97	550.97	1696.84
Housing(net), fuel & power	2464.65	2323.80	3936.23
Household goods & services	1877.74	1217.17	2624.04
Health	465.35	301.64	371.61
Transport	2909.13	1414.30	5033.29
Communication	691.23	448.06	1103.94
Recreation& Culture	3701.04	1949.24	4433.14
Education	-	-	381.02
Restaurant & hotels	1612.86	896.12	2943.84
Miscellaneous goods & services	1603.33	1336.24	2926.45
Other  expenditure groups	3004.14	1947.33	7012.27
Total Spent	23,106.58	14,925.78	36,888.58

Based on MGM Advantage analysis of ONS data and Consumer Price Index

 

Aston Goodey, Sales and Marketing Director, MGM Advantage comments, “Many retired people have had to endure a rise in their cost of living.  This, coupled with the fact that people are generally living longer is placing considerable pressure on retirement income.  All the more reason therefore to shop around for the best annuity, and seek financial advice to ensure you achieve the best possible income in retirement. 

“If you are entitled to an enhanced annuity for example, our research shows that, depending on your medical condition, you could on average achieve around 22% more income3.”

 

-Ends-

 

Notes to editors

* Based on MGM Advantage analysis of ONS Family Spending Reports 2002 – 2007 (this includes the latest report available) and Consumer Price Index.

** Consumer Price Index, November 2009

*** Based on MGM Advantage analysis of market annuity rates on the Moneyfacts database.

For further information

Citigate Dewe Rogerson

Jo Skinner                                     020 7282 1092

Jonathan Henderson                  020 7282 1057

About MGM Advantage

www.mgmadvantage.com

 

History:  Based in Sussex, the life assurer opened its doors in 1852 as Marine and General Mutual Life Assurance Society, to fill the poorly-met insurance needs of seafarers and traders.

MGM Advantage is a new name in the UK retirement income market. Formerly known as MGM Assurance, the company rebranded as MGM Advantage, Designs for Retirement in June 2008 and repositioned the company as a retirement income specialist. Its launch product – an Enhanced Annuity – is designed to provide additional income in retirement for people with any health conditions or a poor medical history and is distributed through financial advisers across the UK.

MGM Advantage is a mutual society owned by its members, and manages assets in excess of £1.4 billion. MGM Advantage’s commitment to customer satisfaction is backed up by an industry-leading customer charter, which promises high quality service and a £25 no-quibble payment to any customer who feels they haven’t receive the level of service they expected.

MGM Advantage Designs for Retirement, MGM Advantage and the MGM Assurance logos are Trade Marks of Marine and General Mutual Life Assurance Society.