The proportion of single pensioners in the UK who have no source of income other than the State has hit its highest level in over two decades, according to new data.
Figures from the Department for Work and Pensions show that the number of single pensioners who rely solely on the State for financial support has increased by 26 per cent to 1.1 million over the last five years, and surged by a staggering 15 per cent in the 12 months to 5 April 2016 to its highest level since the 1995/96 tax year.
An additional 330,000 pensioner couples are also completely dependent on the State Pension, income related benefits and disability benefits for their income, the figures – compiled and analysed by FTSE-listed financial services company Just – show.
According to Just, the average amount of weekly State income for single pensioners, which includes income-related benefits, was £188 in the most recent tax year. Based on the 4.55 million single pensioners in the UK, the total tax bill came to £850m per week.
Nonetheless, Just says that the flat rate new State Pension introduced last year “is widely regarded as barely adequate to live on”.
The latest figures echo research published by life insurance company Prudential in March, which showed that thousands are expected to enter into retirement this year with an income that is up to £1,400 a year below the Joseph Rowntree Foundation’s minimum income standard for a single pensioner.
That standard, set at £186.77 a week, is established by the Foundation – a social policy research and development charity – as a benchmark of the income required to support an acceptable standard of living in the UK.
“The State will never provide a retirement income that allows for many comforts,” says Stephen Lowe, group communications director at Just. He said that “for those who do have some savings, good guidance about what to do with those savings is vital”.
“Poor decisions can quickly erode savings and despite their best endeavours people will find themselves reliant on whatever the State can provide.”
The Government has in recent years come under intense pressure to address the spiralling cost of the state pension, which currently stands at £100bn a year and is growing rapidly as a result of rising life expectancy (and, therefore, the increasing ratio of pensioners to workers).
Under controversial projections drawn up by the Government Actuary’s Department (GAD) and published last month in response to growing concerns of a crunch, people aged under 30 face working until the age of 70 to qualify for a state pension compared to the age of 68 under current legislation.
A separate official review published by John Cridland, former director-general of the Confederation of British Industry (CBI), proposed in March that the state pension age should rise from 67 to 68 between 2037 and 2039, seven years earlier than originally planned.
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