The spring 2013 report monitors financial pressures and concerns among the UK's three ages of retirement: the 55-64s (pre-retirees), 65-74s (retiring) and over-75s (long-term retired).
The over-55s' monthly spending has remained static since May 2012, falling by just £1 to £1,302 in May 2013, but this hides the budget-stretching impact of living costs which have limited their ability to repay debt.
Rising housing costs have also affected over-55 mortgage holders (19%) and private tenants (8%). Monthly housing payments have increased by 6% to £307 since May 2012, equivalent to £194 annually, suggesting the over-55s have felt the impact of rising rents and not benefited from falling mortgage rates.
The secondary importance of repaying debt means unsecured borrowing has grown by 4% since May 2012. The typical over-55 borrower with unsecured debt now owes £23,188, which is 36% more than in May 2011. The biggest impact has been on the 55-64s (whose typical debt has grown by £6,752) and the over-75s (who have shouldered a £1,011 increase in borrowing).
A fall in the percentage of over-55s with debt - from 12% in May 2012 to 9% in May 2013 - shows unsecured debt is becoming increasingly concentrated. The over-75s have made significant progress in this respect, with just 5% having unsecured debt in May 2013 compared with 10% last year.
This improvement appears to be fuelled by more people dipping into their savings to clear their debts as they enter retirement rather than maintaining smaller payments from income. At £11,763, the over-55s' typical savings in May 2013 are 25% lower than in May 2012, driven by a significant fall of 49% to £13,332 among 65-74s.
However, savings habits have noticeably improved with just 35% of over-55s saving nothing each month compared with 42% in May 2012. The 55-64s have led the way by almost doubling the amount they save each month from £21 to £41 as they ready themselves with a nest egg to draw on in later life.
Clive Bolton, managing director of Aviva's At Retirement business, said: "For many people short-term borrowing is a necessary step to manage living costs, deal with unexpected expenses or treat themselves to a holiday. But when their daily outgoings are stretched so far by the demands of basic essentials such as housing, food and travel, they can find that regular repayments are difficult to maintain.
"It is encouraging to see more people putting more money away as they approach retirement, as savings pots are often relied on to clear existing debts. So as not to erode their savings, it is important that over-55s view all of the assets available to them holistically, including their housing wealth, to improve their financial freedom."
