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

Today is State Pension Shortfall Day

Written by: Emma Lunn
With four months of the year still to go, this week marks the point of 2019 when the average retired adult will have already spent income equivalent to the full annual State Pension.

The full State Pension for a single pensioner is £8,767 a year but figures show the average spending for a one-person retired household is £13,265, leaving a shortfall of £4,498. This means today is the day a retiree’s average yearly spending starts to exceed their annual State Pension, assuming they receive the full weekly amount and have average expenditure.

Couples have until Saturday for when their annual spending exceeds their income from the State Pension, leaving them with a £8,710 annual shortfall, according to calculations by Just Group.

Stephen Lowe, group communications director at Just Group, said: “The average retiree given their whole year’s State Pension on January 1st would run out this week and have to start relying on their own funds. Of course, the State Pension is paid weekly so it is spread over a year. But the date does help highlight that what the state provides each year is about four months or £4,500 short of what the average retiree spends each year, so it is important to build up other sources of income.

“The figures show the State Pension remains the bedrock of retirement income for most pensioners, paying for about two-thirds of their annual outgoings on average. They also show how important it is not to rely solely on the State Pension, but to build up private pensions through a working life and use that money wisely during retirement.”

The figures are a reminder that failing to save or opting out of a workplace pension scheme can leave people struggling for income in later life. It also highlights that those thinking of accessing pensions cash should think about what that might mean in a few years or decades time.

“The government’s Money and Pensions Service offers free, independent and impartial pensions help to those people approaching retirement and we’d urge people to take advantage of it,” said Lowe, “It’s easy to make an appointment that lasts around 40 minutes – not a lot of time to make sure 40 years of savings are used wisely.”

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.

Why NS&I may need to trim interest rates for millions of savers

Savers continued to plough money into National Savings and Investment (NS&I) in April, though at a slower...
Why NS&I may need to trim interest rates for millions of savers

NS&I makes it easier to top up Premium Bonds

NS&I has started rolling out an alternative way to make payment, which should make it easier and more secu...
NS&I makes it easier to top up Premium Bonds

Move fast as one-year savings rates hit 5.25% PLUS all the week’s best savings accounts

A new one-year fixed-rate account has launched paying 5.25% from National Bank of Egypt, through Raisin UK.
Move fast as one-year savings rates hit 5.25% PLUS all the week’s best savings accounts

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week