A quarter of over-55s will be reliant on the state pension in retirement
This was more prevalent for women (32%) compared to men (20%), while 23% of those aged between 35 and 54 admitted they didn’t have any pension saved apart from the state pension.
Meanwhile, 28% of 18-34-year-olds said their only source of income in retirement would be from the state pension.
The findings from Interactive Investor’s survey of 2,000 people highlights the importance of the pension triple lock which helps poorer pensioners cover their costs in a time of spiraling inflation. This is because it guarantees the state pension will rise by the higher of earnings growth, inflation or 2.5%.
Alice Guy, head of pensions and savings at Interactive Investor, said the survey “reveals a desperate situation for many older workers.”
She said: “It’s especially worrying because those in their late 50s or older have few options and little time to build up pension wealth. And even among those relying on the state pension, there will be many who don’t get the full amount due to time out from the workplace.”
Pension Awareness Week
The figures come during Pension Awareness Week which shines a spotlight on retirement savings, while at same time, attention turned to the pension triple lock following the publication of the 8.5% earnings growth figure which suggested retirees would see an 8.5% increase in the benefit next year.
According to The Guardian’s report, the Government is considering taking a one-off break from the triple lock, first introduced in 2010 by the Conservative and Liberal Democrat coalition.
According to the newspaper the Treasury is weighing up scrapping this 8.5% increase in state pension payouts next year to save an estimated £1bn.
Guy added: “At a time when the triple lock is under debate, our research shines a light on just how many older people rely on the state pension as their sole source of income in retirement. Auto-enrolment rules, which were introduced in 2012, came in too late to help many older workers, many of whom spent most of their working life with no access to a workplace pension.
“The state pension system in the UK is less generous than many other countries in Europe, providing a flat, basic income, rather than being based on contributions like many other countries. This means pensioners need to save into a workplace or private pension on top to give them enough for a comfortable retirement.”