If you are spending every penny you earn and not saving for a pension and expect the state to step in and bail you out, then the latest statistics from the government will be worrying.
More than a million over 65s rely on the state pension as their only source of income.
Some of these are expats who live in countries where the payment is frozen with no cost of living increases at the amount they first received.
The number of people relying on the state pension alone now stands at the highest level for more than two decades – 1.1 million.
Despite years of publicity inciting people to save more for retirement, the number of people with no retirement savings is up 25% since the financial crash just six years ago.
Average state pension £188 a week
The study from the Department of Work and Pensions highlights that many are widows who had topped up their payment with a spouse’s pension.
The figures were also analysed by pension consultants Just, who found that the average state pension payment for a single pensioner was £188 a week (£9,776 a year). This amount includes other benefits.
Besides the 1.1 million individuals, the figures also disclosed 330,000 couples were also surviving on just the state pension payment.
Another revelation by the DWP analysis was how many people retiring last year qualified for the full state pension.
No comfort for the elderly
In April 2015, the rules changed and now require retirees to have 35 years of national insurance contribution to qualify for the full state pension of £159.55 a week. Previously, the bar was set at 30 years.
Only 41% off 153,990 people claiming the state pension for the first time since April 2016 were paid the full amount.
Stephen Lowe, of Just, said: “The state will never provide a retirement income that allows for many comforts. These figures show we need to encourage people to save and plan for their retirements.
“Workers are automatically enrolled in a company pension unless they choose to opt out. The government also gives savers access to their entire pension at the age of 55, rather than giving it as a monthly income.”
