Being retired costs £11,830 a year in the UK, or nearly £230 a week, according to new research from Key.
The equity release adviser analysed data from the Office for National Statistics to conclude that the weekly bill per person needed to fund the basics amounts to 35 per cent more than the full basic state pension of £168.60, which is available for those who qualify, underlining the need for other sources of income in retirement.
Costs mount up from spending on the basics such as food, clothes and utility bills while leaving some spare cash for eating out and entertainment, Key stated.
However, the cost of retirement varies by region - in the south east of England it is nearly £4,000 a year more at £14,270 than in the West Midlands, where the cost is estimated at £10,280.
Annual cost of a pensioner
Weekly cost of a pensioner
Compared to weekly state pension
Yorkshire & The Humber
Key’s analysis shows the biggest weekly costs are utility bills (gas, electricity and water) and food with both accounting for 20 per cent of overall spending. Both amount to about £2,370 a year on average.
Transport, including the cost of running a car, is responsible for about 16 per cent of bills while spending on entertainment is behind about 23 per cent.
According to Will Hale, chief executive at Key, the research showed that people need to think carefully about how they will bridge the gap between expenditure and earnings.
He said: "Workplace and private pensions as well as savings and investments can help, but for most people maintaining a decent standard of living in retirement means maximising all sources of income.
"Property is increasingly a major part of retirement planning with retired households literally sitting on more than £1trn of wealth."
Data from the equity release adviser showed that retired homeowners using equity release plans take an average £76,500 in property wealth from their homes, which is enough to fund six-and-a-half years of the basics without spending on anything else.
The property wealth released would be enough to cover the shortfall between the state pension and basic spending for nearly 25 years, it added.
Ricky Chan, director at IFS Wealth & Pensions, said the figures seemed about right for those with a frugal retirement lifestyle and who own their own home outright.
He said: "No surprise to see that London and the south east are much higher than average.
"For those that would like to travel more in retirement, spend more time on expensive hobbies or interests, have to provide financial assistance to family members, or have rental costs to account for, we’d expect the 'cost of retirement' per year figure to be higher.
"Each person has a very different lifestyle, so their personal retirement lifestyle cost would also be different.
"State pension has always been just to provide a very basic level of subsistence income, not to cover the full cost of retirement.
"Hence if no additional retirement provisions are made, then the retirees face one of two choices: either to cut their retirement lifestyle cost or have an injection of capital/income from elsewhere. This latter option could include for example working for longer, inheritance, rental income from lodgers, and equity release."