Almost seven million people over the age of 50 have no private pension savings, putting them at risk of retirement poverty.
Around 2.4 million (20 percent) of men over 50 and 4.4 million (33 percent) women are relying on the state pension alone to fund their retirement, new research from SunLife has found.
SunLife’s research found that, of those over 50s who have no private pension savings, nine in ten (92 percent) admit to being worried about money.
More than eight in ten (85 percent) are concerned about the rising cost of living, more than half (55 percent) have a ‘fear’ of sudden unexpected costs, while four in ten (39 percent) are worried specifically about ‘running out of money’ during retirement.
This means that 27 percent of over 50s may face retirement poverty as the state pension alone cannot provide a ‘minimum standard of living’ in retirement’, according to Retirement Living Standards (RLS).
On Monday, March 8, the new state pension increased by 8.5 percent to £221.20, but it still falls well short of what is needed for pensioners to get by, let alone live well.
The RLS updated the individual needs for a ‘minimum standard of living’ in retirement, from an annual income of £12,800 to £14,400 in February this year.
Even on the previous calculations, those living on the state pension alone were more than £2,000 short of achieving their basic needs in retirement, now, even when the increase is taken into account, the hike in living costs means they will be almost £3,000 short – £55 a week.
More than eight in ten (85 percent) are concerned about the rising cost of living, more than half (55 percent) have a ‘fear’ of sudden unexpected costs
The research also found that four in ten (39 percent) are worried specifically about ‘running out of money’ during retirement.
Even amongst those who do have a private pension, 86 percent have financial fears – 69 percent are worried about the cost of living, and 36 percent about running out of money during retirement.
Mark Screeton, chief executive of SunLife said: “It is really worrying that so many over 50s – particularly women – are relying on the state pension alone to fund their retirement. That level of income is nowhere near enough to sustain even a basic standard of living, let alone a lifestyle that most people would call ‘enjoyable’.
“For some homeowners, equity release is one way they choose to boost retirement income. In fact, according to 2023’s report, one in 50 over 55s have already taken out an equity release plan and, of those, 21 percent used the money to supplement their income, with 82 percent saying doing so improved their happiness.
“Anyone who owns their home and is considering equity release can try SunLife’s free Equity Release Calculator, which helps estimate how much you might be able to release from your property. It’s worth noting, however, that equity release is a big decision, and any application will require you to speak to a financial advisor as part of the process.”
