The average single pensioner will have already spent their entire state pension for the year – despite four months of the year remaining, Just Group has warned.
The specialist retirement firm said today (28 August) marked ‘state pension shortfall day’ for single pensioners where their average yearly spending will have exceeded the annual state pension they receive.
For couples, shortfall day will be this Saturday (31 August), assuming they receive the full weekly state pension amount and have average expenditure, according to Just.
Single pensioners face an average annual gap of £4,498, while couples must find an extra £8,710, according to the analysis.
This is because while the full state pension amounts to £8,767.20 a year, figures from the ONS showed average annual spending for a one-person retired household is higher at £13,265.20.
Pensioner couples will receive £17,534.40 a year compared to an average annual expenditure of £26,244.40.
The shortfall of £8,710 would need to be found from private funds to meet the average budget, roughly equivalent to another full state pension, Just said.
Stephen Lowe, group communications director at Just Group, said: “Of course, the state pension is paid weekly so it is spread over a year.
"But the date does help highlight that what the state provides each year is about four months or £4,500 short of what the average retiree spends each year, so it is important to build up other sources of income.
Lowe added there were services people could access to help with their retirement savings concerns.
“Those thinking of accessing pensions cash should think about what that might mean in a few years' or decades' time," he said.
"The government’s Money and Pensions Service offers free, independent and impartial pensions help to those people approaching retirement and we’d urge people to take advantage of it.”
Nicholas Georgiou, broker at Westgate Mortgage Services, said: “Both the state pension and personal allowance amounts are miserably low.
"I have older clients who are concerned they cannot stay in their home, cover costs or retain their quality of life, so are looking to other solutions like equity release.
"But we should also be looking at improving the amount people receive through their state pension.”