Around 4.4 million women in the UK over the age of 50 are at risk of poverty in retirement as they are relying solely on the State Pension to make ends meet, according to latest research.
A third of women in the UK aged over 50 are depending on the State Pension alone to fund retirement, according to insurer SunLife’s ‘Life Well Spent’ report. However, the maximum new State Pension is £203.85 a week in the 2023/24 tax year, or about £10,600 a year, which for many people will be barely enough to cover all their outgoings. The new State Pension will increase from £203.85 to £221.20 a week in April 2024, whilst the full basic State Pension will increase from £156.20 a week to £169.50 a week. You’ll only be eligible for the full State Pension if you have at least 35 years’ worth of qualifying National Insurance Contributions.
However, it’s worth noting that having 35 qualifying years will only result in your receiving the full new State Pension if you have no National Insurance record prior to the 2016/17 tax year. Most people will have made, or been credited with, National Insurance contributions before 6 April 2016, in which case transitional arrangements apply, so as not to disadvantage those who reached pension age before the new State Pension was introduced. This means that it is relatively common for people with more than 35 qualifying years not to receive the full amount (as the changes only came into effect from 2016/17). You can read more in our article How the State Pension works.
If you want a ‘minimum’ standard of living in retirement, you’ll need an annual income of about £14,400 a year, according to the Pensions and Lifetime Savings Association (PLSA), which is over £4,000 a year more than the current full State Pension. This should provide enough to cover essential bills, with a little left over. A retiree needs an income of about £31,300 a year for a ‘moderate’ retirement, which includes the cost of a car and a holiday abroad, or more than twice the full State Pension. Find out more in our article Can you afford to retire?
According to SunLife’s report, over one in four (27%) people aged over 50 have no private pension savings, but women are much more likely to be relying solely on the State Pension than men. About 2.4 million, or 20% of men over 50, are depending on the State Pension to make ends meet in retirement, compared to 4.4 million, or 33% of women.
Mark Screeton, CEO at 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 just not enough to sustain even a basic standard of living, let alone a lifestyle that most people would call ‘enjoyable’.”
The report comes as the gender pension gap between men and women in the UK continues to widen, with women’s private pension pots typically worth around 35% less than men’s, according to a government review. This looked at how much both women and men saved between 2018 and 2020, and found that for every £65 women saved, men saved about £100, on average. Read more in our article Women’s pensions are a third lower than men’s.
SunLife’s research found that of those aged over 50 who expect to rely solely on the State Pension in retirement, more than nine in 10 (92%) are worried about money. Top financial fears include the rising cost of living, sudden unexpected expenses, and running out of money.
Of those aged over 50 who do have some money in private pensions, more than eight in 10 (86%) still have money worries, with around seven in 10 (69%) concerned about the cost of living, and 36% fearful about running out of money during retirement.
Where to get help
If you’ve got any queries about your State Pension, you can contact the Pensions Service by telephone on 0800 731 0469 or find out other ways to get in touch with them here.
If you’re seeking help with deciding what to do with any private pensions (defined contribution pensions) you have, and you’re aged at least 50, you can make an appointment through the government’s free guidance service, Pension Wise.
If you’re thinking about getting professional financial advice, you can find a local financial adviser on VouchedFor or Unbiased.
Alternatively, if you’re looking for somewhere to start, we’ve partnered with independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,000 reviews on VouchedFor, the review site for financial advisors.
If you don’t have any private pension savings and are worried you won’t have enough to live on comfortably when you retire, there are ways you might be able to boost your retirement income.
For example, many retirees on low incomes fail to claim government benefits they’re entitled to, such as Pension Credit, simply because they are unaware they’re eligible for it. This can boost your retirement income, and enable you to claim other benefits. Pension Credit is made up of different parts. The Guarantee Credit part of Pension Credit tops up your income to a guaranteed weekly amount, which in the 2023/24 tax year is £201.05 if you’re single, or £306.85 if you’re in a couple. Find out more in our article Pension Credit explained, and learn whether you might be entitled to other benefits in our Government benefits: the basics section.
If you aren’t eligible for benefits, you can find other ways you might be able to supplement your retirement income in our guide 24 ways to make extra money and boost your income.
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