The insurer’s research also found that a third of over-65s incomes fall below the minimum wage yet more than two thirds of these say they have untapped housing equity.
Five in six over-65s own their home yet 42% of those admit to going without holidays, new cars or eating out because they cannot afford it.
One in twenty said money worries were so bad they couldn’t afford to buy birthday and Christmas presents for friends and family.
Regionally, retirees in the South West and East of England are most likely to go without, with those in Wales (5%) and Scotland (5%) most likely find it a struggle to keep up with their utility payments.
But LV=’s research showed that five in six over-65s own their home and are sitting on an average of £235,750 in property equity which they could access to have a happier and more comfortable retirement.
Despite this, only one in 20 over-65s have unlocked the capital in their property to help fund their retirement.
John Perks, managing director of retirement solutions at LV=, said: “It’s deeply concerning that so many older people are struggling in retirement, often going without life’s essentials but it doesn’t have to be this way.
“There are many options available and using untapped housing wealth to supplement other incomes is a route worth considering, as it allows you to free up capital and afford the retirement you want.
“It is unfortunate that misconceptions about the way retirees can use their property to plug an income shortfall persist as, in the right circumstances, equity release can be used to help afford retirees a better, more comfortable standard of living.
“We would always recommend that someone seeks advice from a specialist before taking out equity release.”