Pensioners can retire with an extra £10k a year -if they cut out ‘luxuries’, say Scottish Widows

On average, we each spend £124 per month on every-day luxuries, including ordering takeaway meals, taking taxis rather than public transport and buying clothes that we hardly wear. At the same time, almost a third (32 per cent) of people said they simply cannot afford to save any more than they already do.

Most people underestimate how much they spend on life’s little luxuries by £74 a month. In fact, one in nine (12 per cent) people admit to not tracking their incidental spending at all and having no idea how much they could be splashing out on non-essentials.

Three-fifths of people (62 per cent) say they plan to set a financial goal in 2018, whether spending less (28 per cent) or saving more (45 per cent).

A third (33 per cent) of people spend less in January, cutting back by an average of £109.03 during the month and while 30 per cent use this money to pay off debts, only 25 per cent save some of it.

Robert Cochran, retirement expert at Scottish Widows, said: “January is traditionally a time when we set out to improve our financial habits for the year ahead and while it would be unrealistic to suggest we live entirely without little luxuries, there is an important message about the need to ensure untracked spending today doesn’t harm our financial security tomorrow.

“Our Retirement Report shows almost 23 million people are failing to save adequately for retirement2, and so there is no time like the present to make the first step towards positive change. It can also help build a longer term saving habit and make a real difference to quality of life in retirement.”