The average yearly spending by retired households has increased to £23,675, a jump of 19% compared to 2021, research by iSIPP has found.

The pension provider has revealed that in its latest analysis of Government data, retired households aged between 65 and 75 are currently spending £455.30 a week. This is compared to £383.40 a week in 2021, creating a total of £19,936.80 a year.

The rise has been attributed to the end of the pandemic restrictions, as well as rising inflation, which has increased costs for retired households, ultimately having an impact on their retirement savings.

iSIPP has said that the rise in spending underlines the need for retirement savings beyond the state pension, with households relying entirely on the full flat-rate state pension would only be gaining £10,600.20 a year, which is just 44% of the money needed to fund a comfortable retirement.

Those relying on a basic state pension, which is worth £8,122.40, would be worse off.

The company found that transport accounted for around 14% of annual spending for retired households, which includes cars and public transport fares. Bills and house maintenance takes up 13% of their annual spend, with food and recreation taking up 12.5% and 12% respectively.

Although the annual spending of retired households aged 75 and over is £18,527.60, this is 18% higher than the average annual spending in 2021.

In comparison, the average annual spending for households in the UK is nearly £27,500, with those aged between 30 and 49 spending the highest amount, which is £31,636 a year.

Managing director at iSIPP, Hrishi Kulkarni, said: “The cost of living crisis is pushing up bills for all households and increasing the cost of maintaining a comfortable lifestyle. The pressure can be most acute for retired households who have fewer options to increase their income to keep pace with rising prices and is particularly painful for those households without private retirement savings.”

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