People usually think they need £1,117 a month to live comfortably in retirement, but the full state pension only pays £802 – leaving a deficit of £315. And new research shows a drastically different retirement for those who rely solely on the state.
Along with five Royal London clients, Sarah Pennells, the mutual’s consumer finance specialist, undertook a week-long ‘State Pensions Challenge’ to live on the current State Pension of £185.15 a week.
More than half of pensioners (54 percent) depend on the state pension as their only source of income.
Stevie-Leigh Edwards from Epping Forest, who took part in the challenge, said: “’I realized that living on the state pension alone is just not feasible.
“It’s hard enough making a living and living a simple life, so I realized that if I had nothing else to rely on, my entire lifestyle would change when I retired.”
An accompanying survey of 4,000 British adults found that 31 per cent below statutory retirement age expect this to be their main source of income when they retire.
This rises to four in ten (39 percent) of those over the age of 55.
Still, 52 percent believe they wouldn’t be able to live well in retirement if retirement was their only income.
Dennis Reed, director of retirement campaign group Silver Voices said:
“This report shows the meager and pitiful nature of the UK state pension. It’s not nearly enough to live on.
“Even the higher monthly amount would disappear into utility bills and the cost of living crisis.
“Only six per cent of pensioners get the full £185.15 a week, with the rest of us getting £142 a week.
“We want a basic state pension of £200 a week and the Government must act radically to protect the elderly at this very worrying time and into the winter.”
Ms Pennells said: “What struck me about living on the state pension was how tough it was, especially in the middle of a cost-of-living crisis, and that without the energy bill hike due in October.
“Everyday items like groceries could be paid for, but there was no money left over for unexpected bills.
“Pension is the basis of most people’s income in retirement, but it’s very unlikely to be enough for the life you want in retirement.
“For those who rely on this as their primary or sole source of income, budgeting will no doubt be extremely difficult as today’s rising costs add to the pressure.”
Private pensions are expected to be the primary source of retirement income for around 38 percent of workers. Those over 55 are the most likely to have their state pension as their primary source of income (51 percent), compared with just a quarter of those aged 18 to 34.
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