A recent study by retirement specialist Just Group has unveiled the significant reliance on state pensions among households 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 two-adult households, primarily depend on state pensions.
These households are classified by the ONS as those receiving at least three-quarters of their total income from the state pension or similar pension-related state benefits. However, the state pension falls short of providing an adequate standard of living in retirement. According to Pension UK’s Retirement Living Standards, a single pensioner would require approximately £13,400 annually to meet the minimum living standard.
The current full state pension amounts to £230.25 per week, resulting in a shortfall of £1,427 annually to achieve the minimum standard of living. David Cooper, a director at Just Group, emphasized the need for bridging the income gap for retirees to ensure a decent standard of living. Cooper suggested exploring eligibility for additional benefits as a way to enhance retirement living standards for those mainly reliant on state pensions.
The state pension increases annually under the triple lock mechanism, guaranteeing adjustments based on earnings growth, inflation, or a minimum of 2.5%. Effective April 2026, the state pension will rise by 4.8%, with the full new state pension increasing to £241.30 per week. Individuals currently retiring need 35 years of National Insurance contributions to qualify for the full state pension amount.