MGM Advantage has calculated that the average retired household where the main occupant is aged 65-74 needs to find an extra £429 a year to maintain the same standard of living they enjoyed a year ago.

For a home where the main occupant is aged 75 and over the figure is £225. These are annual increases of 1.89% and 1.53% respectively. The cost of living for the average home has risen by £670 or 1.85%.

These figures are based on how different households spend their annual budgets and changes to the cost of goods and services between October 2008 and November 2009.

The main areas of expenditure that have seen the biggest increase in cost over the past 12 months include transport (a rise of 6.9%), household goods and services (a rise of 3.5%) and recreation and culture (a rise of 2%).

The retirement income specialist estimates that the annual household expenditure for a home where the main occupant is aged 65-74 is around £23,107, compared to £14,926 for a household where they are aged 75 and over, and £36,889 for the average home.

Aston Goodey, sales and marketing director at MGM Advantage, said: “Many retired people have had to endure a rise in their cost of living. This