More than one in five retired people have increased the proportion of their wealth held in cash since leaving work, with potential long-term care and health costs the main motivation for saving, according to research for Investec Save.

The study, conducted by independent research agency PureProfile in July, found that 21% of retired people had increased their cash holdings as a proportion of total wealth since retirement, while 14% had reduced their share by gifting money or investing more.

More than a third (36%) said preparing for future care or medical expenses was their main reason for saving.

A further 32% were putting money aside for major purchases, such as home improvements or a new car, while 22% wanted to provide a financial safety net for their children or grandchildren. Another 7% were saving to leave a significant inheritance.

Retired people held an average of 21% of their total wealth in cash, with 19% keeping more than half their wealth in savings accounts.

Access to money for travel and leisure was the biggest savings concern for 37% of respondents, while 22% prioritised maintaining liquidity for potential social care or medical costs. Protecting savings against inflation was the main concern for 18%, while 14% prioritised growing their money and 9% wanted to retain enough cash to leave an inheritance.

David Hunt, head of savings at Investec Bank, said: "Retired people are not simply running down their savings after leaving work. More than one in five have increased the proportion of their wealth held in cash, while one in five say more than half of their total wealth is in savings accounts.

"Future care and health costs are the main reason for saving among more than a third of those surveyed. Holding money across instant-access, notice and fixed-term accounts can help savers balance access to cash with earning a return over different time periods."

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