You are here: Home - Retirement - Retirement planning - News -

Retiree couples need £8k more to survive the year

0
Written by: Paloma Kubiak
03/09/2018
Retirees who rely solely on the state pension will struggle to make ends meet for the rest of the year unless they rein in their spending, a report warns. 

Figures from the Office for National Statistics show the average two person pensioner household spends around £25,500 a year (£490 per week), but two full state pensions provide £17,092 over the course of a year (£164.35 per person per week).

This means couples with an average expenditure, who are solely reliant on the state pension, will run out of money today and need additional income for the four remaining months of the year.

This has led retirement firm Just Group to mark today ‘State Pension Shortfall day’.

Households will have to plug a financial gap of £8,367 – nearly another full state pension – to make ends meet until December.

Stephen Lowe, group communications director at Just Group, said the figures are a good benchmark for those thinking about how they will fund their retirement.

“The state pension is the bedrock of many people’s income once they retire and will cover the absolute basics. But this analysis shows it will only cover two thirds of the typical annual expenditure of retired households – leaving people to find the other third themselves.

“We’re all familiar with the advice to start saving for a pension at an early age, but what if your age puts you nearer retirement than university? The good news is you do have some options.”

With seven in 10 people accessing their pensions before the age of 65, this could significantly reduce the amount of income people receive in later life.

Retirees should contact Pension Wise or The Pension Advisory Service to get some free, independent and impartial guidance to help make a plan.

Lowe added: “Taking guidance will help people get a good idea of how much they are likely to need in retirement, then they can manage their existing savings, and perhaps plan to save more, so they can avoid financial difficulty when they no longer have a salary.

“None of us wants to be poor in retirement but pension planning isn’t front of mind for most people. ‘State pension shortfall day’ should provide a good nudge to encourage people to look ahead and start planning for retirement.”

Are you missing out on other state benefits?

Retired homeowners could be missing out on other benefits they’re entitled to, according to Just.

It said four in 10 pensioner homeowners eligible for state support are failing to claim any benefits while a further two in 10 not receiving their full entitlement. This can add up to a few hundred and in some cases a few thousand pounds a year that would make a big difference to people’s lives.

Lowe said: “The message is clear – retired homeowners should take steps to find out what help they can claim. The government website direct.gov.uk is a mine of information, while Citizens Advice or other charities may also be able to help.”

Related: See YourMoney.com’s Pensioner households miss out on £1,000 of state benefits for more information.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Percentage symbols tumble around a house
Mortgage rates go up this month but savers still snubbed

If you’re on a variable rate deal, it’s likely you’ll be paying more for your mortgage from this month.

Close