The average cost of being a pensioner is £10,020 a year, based on Key Retirement Solutions’ analysis of spending across the basic necessities.

Its research shows the average over-65 household spends £10,020 a year with the biggest cost coming from housing and heating at £1,580 narrowly ahead of spending on food and non-alcoholic drink.

In total pensioner spending contributes £103.9 billion to total spending across the UK with more than £16.4 billion spent on housing and energy bills.

But the analysis reveals major differences in the cost of living around the country with pensioners in London, the South East and the East of England spending more than the national average. In London the over-65s spend 22% more than the national average at nearly £12,300 a year compared with over-65s in Cardiff who spend £8,180 a year on average.

The cost of living in Cardiff is around 50% lower than in London while the over-65s in Newcastle spend just slightly more at £8,220 a year.

Key Retirement Solutions is urging pensioners and those approaching retirement to maximise income as much as possible.

Dean Mirfin, group director at Key Retirement Solutions, said: “The basic cost of living for a pensioner at £10,020 covers only the basics without much scope for emergency spending or any luxuries.

“The State Pension is a vital safety net but cannot deliver all the income needed so maximising income from housing wealth or retirement savings is crucial and getting impartial expert advice is vital.

“It is also clear that where you live matters very much in how expensive your life in retirement will be. The £4,100 gap between Cardiff and London is a major difference.”

The analysis shows average spending in Wales compared with the UK is nearly a fifth lower while in Scotland it is 12% lower and in Northern Ireland and England is nearly in line with the UK average at just 1% lower and 1% higher respectively.

Pensioners in the South East spend 18% more than the UK average and they spend 9% more in the East of England.

Data from Key Retirement’s Equity Release Market Monitor shows the average customer taking out an equity release plan last year released £52,268 and total funds released were £961.41 million. Nearly 1 in 5 who released equity from their homes did so to meet day to day living costs.