Over-50s 'digging into savings'
People approaching retirement are more likely to be digging into their savings to cover essential living costs than any other age group, consumer campaigners are warning.
Almost one quarter (23%) of 50 to 64-year-olds were forced to raid their nest eggs to pay for bills last month, compared with one fifth (20%) of consumers generally, according to a survey by Which?
The research was conducted just before a wave of energy giants announced bill hikes. Centrica-owned energy giant British Gas recently announced it was hiking electricity bills by 10.4% and gas tariffs by 8.4% - affecting 7.8 million households - while SSE said it was hitting seven million customers with an 8.2% rise.
A combination of Government green levies and rising energy costs have been blamed for the increases. The Government has advised consumers to shop around for the best deal.
The Which? research, which was conducted in September, found that 50 to 64-year-olds were most likely to be using their savings to pay for food or a household bill.
Concerns have recently been raised about a surging demand for emergency foodbanks as the pressure on household finances continues.
More than 350,000 people received a three-day food package from the Trussell Trust between April and September, three times as many as the same period last year.
Which? found that half (49%) of people are worried about the level of their savings generally.
One fifth (20%) of households were found to have no savings at all, leaving people vulnerable to financial shocks.
Around two-fifths (43%) said they would struggle with an unexpected expense and just over one quarter (26%) are saving for a rainy day or a surprise bill.
Which?'s analysis of the Office for National Statistics' Living Costs and Food Survey found that the average household saves £5.20 per week, or £270.40 per year.
The prospect of continued poor returns on savings amid the low interest rate environment is making the problem worse.
After the cost of living, savings interest rates is one of consumers' main concerns, Which? found, with almost three-fifths of people (58%) saying they were worried. Those approaching retirement were particularly anxious about savings rates, with 62% of those in this age group saying they are concerned.
The Financial Conduct Authority recently launched an investigation into the cash savings market, to assess whether competition is working in the best interests of consumers, particularly in terms of them getting the best returns possible and information to meets their needs.
It is looking at "teaser" rates, where introductory deals are offered to savers, as well as how often consumers switch around.
Which? executive director, Richard Lloyd, said: "Our research paints a worrying picture of consumers vulnerable to financial shocks and unable save for retirement, with the rising cost of living forcing them to dip into their savings to pay for essentials like food and bills.
"We're pleased the Financial Conduct Authority is looking into the savings market and we want the regulator to take real action to help savers to get the best deal out of the savings market, rather than leaving billions of pounds languishing in accounts paying poor levels of interest."
More than 2,000 people were surveyed last month across the UK.
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