A recent study by retirement specialist Just Group has uncovered the significant number of households relying predominantly on the state pension for their retirement income. The analysis of Office for National Statistics (ONS) data revealed that over 1.2 million individuals, including around 740,000 single retirees and 500,000 retired two-adult households, heavily depend on the state pension.
According to ONS criteria, a household is classified 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 meeting the standard for a comfortable retirement. The Retirement Living Standards from Pension UK indicate that a single pensioner would need an annual income of approximately £13,400 to achieve a minimum standard of living.
The full new state pension amounts to £230.25 per week, creating a shortfall of £1,427 annually for a minimum standard of living in retirement. David Cooper, director at Just Group, emphasized the need for additional income to bridge the gap between the current state pension and the minimum income standard recommended by Pension UK.
To address this shortfall, retirees are encouraged to explore potential entitlement to additional benefits, which could significantly enhance their living standards in retirement. The state pension undergoes annual increments in line with the triple lock policy, ensuring adjustments based on earnings growth, inflation, or a minimum of 2.5%.
Starting from April 2026, the state pension will increase by 4.8%, with the full new state pension rising from £230.25 to £241.30 per week. Individuals currently retiring require 35 years of National Insurance contributions to qualify for the full state pension amount.