Retirees still expect to use their credit cards

September 14, 2006

By Peter Kenny

A report published today by AXA, a worldwide leader in financial protection, shows that many people still expect to be using their credit cards when they retire.

AXA’s national research discovered that 45 per cent , over 17 million, of the adult population were expecting to use their credit cards after their retiral age. This figure increased as people got older while only 26 per cent of adults believe they will not be using any form of credit when they retire.

AXA performed an experiment with 26 households throughout the UK and challenged them to live off the equivelent disposable state pension for one week. The households included families, couples and singles.

The results showed that only one household managed to live within the state pension constraints. The highest overspend for the week was £327.18 while the lowest was £0.54.

With the experiment beginning on the Thursday, many households had used their weekly allowance by Sunday lunchtime.

Saran Allott Davey, AXA Avenue’s resident independent financial adviser, said, “For those that took part, this experiment has been a real call to action. Many of them had visions of retiring at 55, even though they had no clear idea of how much money they were set to have as a pension. The pensions industry and the government needs to get the message across that it is easier to make some small changes now to set aside long term savings for retirement than having to make major and uncomfortable changes later on.”