The full state pension for a retired couple covers just over three-quarters of annual spending, which means that they have ran out of money today (6 October), according to calculations from Just.
According to official figures, the average retired couple’s spending power is £21,770 a year, while the full State Pension for a retired couple brings in £16,593, said Just.
From today onwards, which the retirement services provider has rebranded as the ‘state pension shortfall day’, households will need to meet spending from their own sources.
That leaves a financial gap of £5,177 a year compared to the budget of a normal retired couple, which needs to come from private pensions, savings and investments.
According to Stephen Lowe, group communications director at Just, the state pension “provides a significant part of income for most pensioner households”.
However, it “still only covers about three in every four pounds that the average couple has available to spend over the course of a year”, he added.
Just is also concerned that the rising numbers of savers accessing pension benefits early may be unaware of the long-term impact of this decision.
Mr Lowe said: “Of those accessing pension benefits, seven in 10 are aged under 65 and, of those around 60 per cent take a full cash withdrawal.
“That is fine if they have other sources of capital or income, but many people struggle to save enough into a pension.
“Taking it out of the pension years earlier than necessary could well harm its future income potential.”
This situation could be even worse in the future, since the government announced in July that the state pension age increase should be brought forward to 68 between 2037 and 2039, due to increases in life expectancy.
Under the current law, the state pension age is due to increase to 68 between 2044 and 2046.
The change to the state pension age will leave 7.6 million people £10,000 worse off, according to analysis by the House of Commons Library.
According to Malcolm Mclean, senior consultant at Barnet Waddingham, Just’s analysis shows that “most people relying on state pension on its own is inadequate”.
He said: “People need to be made aware that they need to save privately, even more now that the state pension age is changing.”