Rising cost of living drains retirees' savings More worryingly, those approaching retirement shoulder the majority of the unsecured debt. At a time when they should be paying as much as possible into their pension, borrowers aged between 55 and 64 have seen debts on credit cards and personal loans rise by £6,752 in two years. Clive Bolton of Aviva said that for many people short-term borrowing was a necessary step to manage living costs - but when daily outgoings were stretched by the demands of basic essentials, they could find regular repayments difficult to maintain. In order to meet these debt payments the over 55s are plundering their savings. The average savings pot for that age group is £11,763 - down by a whopping 36pc, having peaked in September last year at £18,364. The most significant reduction in savings was among those in the first decade of retirement, whose pot has halved over the past 12 months as living costs escalated. While those still in work have seen incomes typically increase by £166 a month, those aged between 65 and 74 suffered an £18 loss of monthly income in the past 12 months, while the typical over-75 in May 2013 survives on £109 less each month than they did last year. This is due to ever decreasing returns from savings and investments. Only three in 10 over-55s now rely on the income generated by savings and investments - instead having to plunder capital. Instead, personal pensions are making up the difference - and wages for those who choose to work past retirement age. In fact, among the over-75s incomes have risen. Retirees looking to boost their incomes could consider releasing equity from their homes, as well as income-paying investments such as corporate bonds. Angela Seymour-Jackson of Aegon said the crucial advice to avoid pensioner poverty was to act fast. "Younger respondents are more at risk of a retirement crisis than any generation that has gone before," she said. They are increasingly becoming aware that they will have to start planning for the possibility that they will need to support ageing parents, themselves and their children in later life. "This "squeezed generation" is most at risk of stumbling into an impoverished retirement if they don't act soon. Longer life expectancy, lower pension contributions, reducing state support and increasing financial dependency from family members makes planning for retirement all the more important. She advocated that younger workers enrol in their workplace pension scheme in order to benefit from company and government contributions.