A recent study has unveiled the significant number of households heavily relying on the state pension as their main source of retirement income. Research conducted by Just Group using data from the Office for National Statistics (ONS) indicates that over 1.2 million individuals, including 740,000 single retirees and 500,000 retired two-adult households, primarily depend on the state pension.
According to the ONS, a household is categorized as mainly reliant on the state pension if at least three quarters of its total income comes from the state pension or similar pension-related state benefits. However, the state pension falls short of providing an adequate standard of living in retirement. The Retirement Living Standards proposed by Pension UK suggest that a single pensioner requires an annual income of approximately £13,400 to meet the minimum living standard.
The current full state pension amounts to £230.25 per week, leaving a shortfall of £1,427 annually for achieving the minimum retirement living standard. Director David Cooper from Just Group emphasized the necessity for additional income to bridge the gap for retirees aiming for a better living standard. Cooper highlighted the importance of exploring potential entitlement to extra benefits to enhance retirement living conditions.
The state pension undergoes annual adjustments in line with the triple lock system, ensuring an increase in line with the highest of earnings growth, inflation, or 2.5%. From April 2026, the state pension will rise by 4.8%, with the full new state pension increasing to £241.30 per week and the old basic state pension rising to £184.90 per week. Individuals currently retiring typically need 35 years of National Insurance contributions to receive the full state pension.
Taking advantage of unclaimed benefits could significantly uplift retirement living standards for many, encouraging individuals to verify their eligibility for additional support. It is crucial for retirees to explore all available avenues to supplement their retirement income effectively.