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Standard of living down for retired couples, up for working households

Retired couples have seen their standard of living fall for the second year in a row while the average working family and single pensioners are all better off, according to new research.

The annual Britannic Asset Management Retired Income Monitor, published last week, shows retired couples have seen their weekly disposable income fall by 1 per cent to £346 from £350 last year. The research, carried out for BAM by Datamonitor, says when inflation is factored in, the standard of living has fallen 2.9 per cent.

The survey also reveals that the average single retired person&#39s weekly disposable income has risen by 13 per cent to £236 in 2002 from £208 in 2001, while the average working household&#39s income has grown by 13 per cent to £646 from £571.

BAM says this difference in income between retired couples and single people could be caused by lower annuity rates for couples and cautious investing to guarantee that some funds remain for a surviving partner.

Couples may be eating into their capital to maintain their standard of living and leaving themselves less able to generate income, says BAM.

The fund company says its corporate bond fund has generated a return of 4.97 per cent over the last year and it expects the fund to generate income of 5.5 to 6 per cent while preserving capital over the next year.

Director Francis Ghiloni says: “Our retirement income monitor highlights the income challenge that people face once they retire if they are to maintain their standard of living year on year. You cannot improve your annuity or your company pension once you retire but you can make the most of any spare cash you have by seeking out a good source of income.”

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