Study finds North East is the cheapest place to be a pensioner

The North East is the cheapest place to be a pensioner with over-65s needing an annual income of £14,782 to cover spending, new analysis from pension provider iSIPP shows.

Retired people in the North East spend just over £3,000 a year less than the national average and up to £6,768 than in London and the South East.

The pension provider’s analysis of the most recent Government data on family spending shows average over-65s spend £17,810 a year with food, housing costs and transport accounting for around 43% of total annual spending.

Those aged between 65 and 74 spend an average of nearly £20,000 a year but annual average spending among those aged 75-plus drops to £15,680.

Average national spending however only tells part of the story and where pensioners live has a major impact on how much they spend a year on average.

Housing and maintenance costs plus spending on food and transport including fuel prices and the cost of alcoholic drinks and clothes mean there are major regional differences in the cost of being a pensioner.

The elderly in London and the South East need the biggest incomes, the analysis found. In London over-65s spend £21,550 while costs drop slightly outside the capital in the wider South East of England to £21,372.

Over 65s in the South West and East of England also spend more than the national average but the extra spending is only £712 and £534 a year, respectively.

iSIPP says the spending figures are a useful guide to how much income people will need in retirement to meet basic costs but urges retirement savers to remember the data only focuses on averages.

iSIPP Managing Director Hrishi Kulkarni said: “Where you live in the country can make a massive difference to how much you will spend a year in retirement.

“However, pensioners cannot simply move to another part of the country on retirement to benefit from a lower cost of living and average figures do not tell the whole story. What is clear is that people need to save as much as possible for retirement as the basic spending of £17,810 is not covered by the State Pension alone which from April 6th this year is worth around £10,600 a year.