Twenty per cent of men and 33% of women are relying on the state pension alone in retirement, despite it being insufficient for a moderate retirement, according to new research by SunLife.
Almost seven million people over 50 have no private pension, putting them at risk of retirement poverty, according to new research.
SunLife’s second annual Life Well Spent report shows that around 2.4 million (20%) of men over 50 and 4.4 million (33%) women are relying on the state pension alone to fund their retirement, which is currently £10,600 a year.
According to Retirement Living Standards for a ‘moderate’ retirement, an individual needs £23,300 a year – more than twice the state pension. Even a ‘minimum standard of living’, would need an annual income of £12,800, more than £2,000 more than the state pension, meaning 6.9 million over 50s are at risk of poverty in retirement, says SunLife.
The research also found that, of those over 50s who have only the state pension to fund their retirement, nine in 10 (92%) admit to being worried about money. More than eight in 10 (85%) are concerned about the rising cost of living, more than half (55%) have a ‘fear’ of sudden unexpected costs while four in 10 (39%) are worried specifically about ‘running out of money’ during retirement.
Even amongst those who do have a private pension, 86% have financial fears – 69% are worried about the cost of living and 36% about running out of money during retirement.
Those who are yet to retire are the most concerned – 43% of over 50s that are still in work say they are worried they will not have enough money to fund their retirement, rising to 44% of those who do not have any private pension savings. In comparison, 27% of those who are already retired are worried about running out of money, rising slightly to 28% of those currently living on the state pension alone.
SunLife’s data also reveals that 18% of working homeowners aged 50+ have no private pension savings, while 17% of retired homeowners are relying on the state pension alone, despite the fact they may have a considerable amount of capital tied up in their home.
Mark Screeton, CEO at SunLife, said: “It is really worrying that so many over 50s – particularly women – are relying on the state pension alone to fund their retirement. That level of income is just not enough to sustain even a basic standard of living, let alone a lifestyle that most people would call ‘enjoyable’.
“For some homeowners, equity release is one way they choose to boost retirement income. In fact, according to this year’s report, one in 50 over 55s have already taken out an equity release plan and, of those, 21% used the money supplement their income, with 82% saying doing so improved their happiness.”
*SunLife has a free Equity Release Calculator, which helps estimate how much you might be able to release from your property.