Pensioners need to find more than £400 extra a year to cope with rising living costs, MGM Advantage has revealed.

The retirement income specialist has estimated that the average household, where the main occupant is aged between 65 and 74, spends around £23,000 a year, and as a result needs to find on average an extra £429 a year to maintain the standard of living they enjoyed 12 months ago.

Meanwhile, the average household where the main occupant is aged 75 and over on average spends nearly £15,000 a year and will need to find an additional £225 this year to maintain the standard of living they have become accustomed to.

MGM Advantage has calculated that these figures represent an annual increase of 1.89 per cent and 1.53 per cent respectively.

Recreation and culture appears to be the most expensive expenditure with an average spend of around £3,700 for the average retired household where the main resident aged between 65 and 74.

Meanwhile, households where the main occupant is aged 75 or over, spend on average more than £2300 on heating and electricity for their home.

Commenting, Aston Goodey, director of sales and marketing at MGM Advantage, believes these figures highlight the importance of choosing the right annuity.

“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 per cent more income,” he said.

© Fair Investment Company Ltd