Today is ‘State Pension Shortfall Day’ when the average spending of a retired two-adult household outstrips the income from two full state pensions.
Figures from the Office for National Statistics (ONS) show that the average retired couple’s spending is around £25,500 a year, while two full state pensions provide just £17,092.
This leaves a shortfall of £8,367 a year, meaning retired couples will have to plug the gap with their own savings or private pension.
Stephen Lowe, group communications director at Just Group, says: “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.”
Mr Lowe suggests savers start planning for retirement by getting professional advice, for example from Pension Wise or The Pension Advisory Service.
Following the introduction of pension freedoms, savers may be unaware of the long-term impact on their savings by withdrawing money from their pension earlier than necessary, according to Just.
Mr Lowe says: “We know that seven in 10 access their pension before age 65 and that accessing pension pots early has become ‘the new norm,’ yet this could significantly reduce the amount of income people can achieve in later life.”
He also believes there is evidence that pensioner homeowners are missing out on other state benefits, which could help with financing the remaining four months of the year.
“Four in 10 pensioner homeowners eligible for state support are failing to claim any benefits, while a further two in 10 are 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.
He adds: “The message is clear – retired homeowners should take steps to find out what help they can claim.”
The government website Direct.gov.uk provides further information on what state benefits are available, while Citizens Advice or other charities may also be able to help.