Pensioners struggle to live comfortably on state pension handouts

While some people may benefit from the annual increase in state pensions, more than two-thirds (68%) of UK retirees revealed that they would need more than Government handouts in order to live comfortably, according to a major new report commissioned by FTSE 100 life and pensions company Friends Provident.

The Freetirement Generation report, undertaken by social trend researchers the Social Issues Research Centre (SIRC), has revealed that just 4% of people in the UK feel they could live comfortably on the amount offered by the basic state pension, whereas seven in 10 (69%) people – both those retired and still working – estimate they would need £600 or more a month to live comfortably.

The report also revealed that while seven in 10 (69%) of current retirees have adequate funds to support themselves in retirement, those still in employment are looking at a different picture when they retire, with a third (32%) anticipating that they will struggle financially and one in seven (14%) expecting to wish they had saved more for their retirement.

Jeremy Ward, head of pensions marketing at Friends Provident, said: “Whilst the recent modest state pension increase may see more going into people’s pockets each year, our research has found that the vast majority of people need far more money than the state provides in order to live comfortably. Three quarters of people yet to retire expect to need more than £600 a month to live comfortably, significantly more than the state provides. Considering that a quarter of people haven’t yet started planning or don’t intend to plan for their retirement, this is something they can only dream about.

“By ignoring how much they need to save to live comfortably in retirement or how soon they need to start saving, many Brits are facing a potential pension shortfall.”