1.2 million state pensioners barely get by as they have to cut costs by up to £166 a month | Personal Finance | Finance
More than a million state pensioners rely on the state pension as their main source of income, giving them some financial freedom to meet rising costs.
Retirement expert Just Group looked at ONS data and found that 1.2 million retired households rely on their state pension or pension-related benefits for three quarters of their income.
Someone with no income over and above their state pension would have a shortfall of around £166 a month, even if they are on the full amount of £203.85 a week.
This is based on figures from the Pensions and Life Savings Association (PLSA), which sets out that a single pensioner needs at least £12,800 a year to get it.
Someone on the new full state pension, whose state pension accounted for only three quarters of their total income, would have just £13,250 a year, just £450 above the level needed for their basic costs.
Stephen Lowe, group communications director at Just Group, said: “The PLSA minimum income standard is more than £2,000 a year higher than the current state pension and shows the gap that there are over a million pensioners, who are heavily reliant on the pension states, need a bridge to achieve a minimum standard of living.
“Bridging this income gap is a difficult task as this group of people are not of working age so going out to work and earning more is unlikely to be an option.”
Mr Lowe said the results put pressure on Chancellor Jeremy Hunt to commit to a triple lock-in increase in his autumn statement tomorrow, which would add 8.5 per cent to payments.
He said: “The broad financial vulnerability and reliance on state income highlighted in our research puts even more pressure on the Chancellor to confirm the triple lock in Wednesday’s autumn statement.
“The maintenance of the triple lock could be a lifesaver for the large number of pensioners whose livelihood depends on the state pension to keep up with living costs.”
The majority of households that rely heavily on their state pension were single pensioners, 760,000 of the 1.2 million households.
Of these single families, 580,000 are women and 180,000 are men. There are twice as many women over the age of 90 as men, and 72 per cent of women aged 85 or over are widowed.
Mr Lowe urged state pensioners to see if they can supplement their income by claiming Pension Credit. The benefit provides an average income increase of more than £3,000 a year.
He said: “Checking benefit eligibility is an equally important step in ensuring a financially stable retirement, and the latest data on benefit take-up shows that only six in ten Pension Credit eligible people have claimed it, left £2.1 billion of unclaimed support i. 2022.”
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