More than half of over-55s cut back on heating and lighting to save money

More than half of over 55s are planning to cut back on heating and electricity use in order to try and mitigate the impact of inflation on their living costs, new data shows.

Inflation hit 10.1 per cent in September, a sharp increase on 3.1 per cent at the same time last year, and is likely to have a greater impact on over 55s who spend more of their budget on food and utilities compared to other age groups.

Only 14 per cent of the group say they are not planning to do anything to make their money go further, according to research from the equity release provider Key. 

Take a look at our inflation calculator that uses official UK inflation data to show how prices have changed and what money used to be worth. 

Within the age group those working part-time are the most frugal, with nearly two thirds (62 pr cent) saying they plan to use less heating and 61 per cent saying they are turning off lights if they are not in use.

What is more, nearly half of the age group (45 per cent) say they now go out less as a way of saving money, while 29 per cent say they will use less energy on cooking. 

Retirees are also looking for ways to boost their income as they wait to find out if their state pensions will rise with inflation. 

Prime Minister Rishi Sunak and Chancellor Jeremy Hunt have remained tight-lipped on whether the triple lock will remain in place when they announce new measures in the Autumn fiscal statement on 17 November.

Nearly one in five of older people (18 per cent) say they are moving their savings to higher-interest accounts, or reviewing their benefits to ensure they are claiming everything they are entitled to. 

Nearly half of over-55s say they are going out less to try and save money, according to Key

>> Check latest easy-access savings rates using our independent best-buy table. 

However, one in four say there is nothing they can do to increase their income. 

Will Hale, CEO at Key Later Life Finance, said: ‘Most people in the UK are not only fully aware of the impact of the cost-of-living crisis but choosing to make economies where possible to either make their money go further or boost their financial security. 

‘Over-55s are no different but with more of their expenditure going on food and utilities, they are particularly vulnerable to the price increases we’ve seen.

‘While building up a pension nest egg over your career is arguably the best approach, this is not a possibility for everyone, so they really need to consider all their options including housing equity. 

‘With over-65s currently sitting on £2.95 trillion worth of unmortgaged equity there is no doubt that property can play a role to help older people to maintain their standard of living in these challenging times or indeed to assist younger family members who are likely also to be feeling the pinch.’

Equity release products have been steadily rising in popularity, in September it was revealed that a fifth of plans are now taken out to cover day-to-day living costs.

But equity release isn’t necessarily the panacea to the cost of living crisis. While they are a way for homeowners to access tax-free cash, interest rates can be prohibitive and it prevents them passing on their home to their family. 

Alice Watson of Canada Life says that equity release products will be far down the list of options a financial adviser will give older homeowners when looking for alternative sources of cash.