A recent study by retirement specialist Just Group reveals that a significant number of households rely heavily on their state pension for retirement income. The analysis of Office for National Statistics (ONS) data indicates that over 1.2 million individuals, including 740,000 single retirees and 500,000 retired two-adult households, are primarily dependent 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 benefits. However, the state pension falls short of providing a good standard of living in retirement. The Retirement Living Standards from Pension UK suggest that a single pensioner would need around £13,400 annually to meet the “minimum” standard of living.
The full new state pension amounts to £230.25 per week, resulting in a yearly shortfall of £1,427 for a minimum standard of living. David Cooper, director at Just Group, emphasized the gap between the current state pension and the minimum income standard recommended by Pension UK. Cooper highlighted the importance of exploring additional benefits to bridge the income gap and improve retirement living standards.
The state pension increases annually under the triple lock mechanism, which guarantees a rise in line with the highest of earnings growth, inflation, or 2.5%. Starting April 2026, the state pension will increase by 4.8%, with the full new state pension rising to £241.30 per week. Individuals retiring now typically need 35 years of National Insurance contributions to receive the full state pension entitlement.