Fears over standard of living in retirement

People nearing retirement are more concerned than ever about their financial security, according to a survey from insurer LV.

Increasing food and utility bills were cited as the biggest financial worry among the 1,655 people, all over the age of 50, surveyed. Four out of 10 fear a recession will affect their wealth when they retire. The next biggest concern is rising mortgage rates.

LV also revealed that people approaching retirement are aware that there is a big gap between the income they will need to maintain their standard of living in retirement, and what they will actually have saved. On average, the survey sample said they would need £20,100 a year in retirement, but believed they would actually have an income of only £16,900.

"The rising cost of living, fears of a recession and widespread media coverage of the credit crunch have created an anxious majority of people facing retirement who are very concerned about their financial future," said Mike Rogers, LV's group chief executive.

"But it is worrying that as many as a quarter of the people we surveyed are making no provision at all for their retirement. A further 46 per cent are failing to increase their savings despite fully expecting an income shortfall when they retire."

However, instead of being able to focus on building their retirement savings, almost half of those surveyed have been asked for financial help by a family member in the past year.