The state pension makes up almost £6 in every £10 of income received by people aged 65 and over, according to new research from Just Group.
The provider, which had polled 1,000 UK adults aged 65+, found almost three quarters of this age group received half their income or more from the state pension, while people in the lowest income groups relied on the government benefit for up to 90 per cent of their retirement income.
Women were found to be more reliant on the state pension than men, at 68 and 44 per cent respectively.
The state pension was the largest income source for all groups, except those with annual incomes of more than £20,000 who received a higher proportion of their income from defined benefit (DB) schemes.
Where does the income of people aged 65 or older come from? | | |
| All aged 65+ | Men aged 65+ | Women aged 65+ | Income PA <£5,000 | Income PA >£20,000 |
Wage | 11% | 13% | 9% | 4% | 18% |
State Pension | 57% | 44% | 68% | 90% | 28% |
DB pension | 18% | 26% | 12% | 2% | 33% |
Annuity | 4% | 6% | 2% | 1% | 6% |
Drawdown | 1% | 1% | 1% | 0% | 2% |
Other savings or investments | 5% | 5% | 6% | 2% | 7% |
Rental income | 1% | 1% | 1% | 0% | 2% |
Other | 4% | 5% | 3% | 1% | 5% |
The research also revealed almost two in three (65 per cent) people aged 65 and over had started thinking about being able to afford to retire before their state pension age.
Stephen Lowe, group communications director at Just, said the significance of state pension age on most people’s lives should not be underestimated.
He said: "For many it marks the point where people can finally afford to step back from work and it provides the financial bedrock for later life."
State pension age has been set at 65 for men since 1925, and was equalised for women in November.
Since December 6, and spread over two years, it will gradually increase for both men and women to 66. It will rise again to 67 starting in 2028.
Mr Lowe said the changes were likely to have a "major effect" on the labour market.
He said: "We can expect to see the growth in the number of older workers [who] make up a large part of the rise in overall employment for the next decade."
maria.espadinha@ft.com
