A recent study by retirement specialist Just Group has uncovered the significant reliance of many households solely 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 740,000 single retirees and 500,000 two-adult households, primarily depend on the state pension.
According to the ONS, 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 providing a comfortable retirement living standard. Pension UK’s Retirement Living Standards indicate that a single pensioner needs an annual income of approximately £13,400 to meet a basic living standard.
The current full state pension amounts to £230.25 per week, leaving a shortfall of £1,427 per year to reach the minimum living standard in retirement. David Cooper, director at Just Group, emphasized the need for additional financial support for retirees, as many struggle to bridge the income gap. He suggested exploring eligibility for other benefits to improve living standards during retirement.
The state pension increases annually under the triple lock system, ensuring adjustments in line with the highest of earnings growth, inflation, or a minimum of 2.5%. From April 2026, the state pension will rise by 4.8%, with the full new state pension increasing to £241.30 per week. Individuals retiring now require 35 years of National Insurance contributions to receive the full state pension amount.