State pension is running out today for millions of British retirees

We have now reached the point in 2021 where the average retired couple will have already spent an income equivalent to two full annual state pensions, with four months of the year still to go.

This marks the arrival of State Pension Shortfall Day, according to the analysis of retirement specialist Just Group, Lincolnshire Live writes.

Official figures show the average annual expenditure for a two-person retirement household is £ 28,064, with two full state pensions equivalent to £ 18,680 per year.

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This leaves a gap of £ 9,384 which must be filled by additional sources of income such as private pensions or other savings and investments, otherwise the retired couple will be strapped for cash by the end of August. (August 31).

Single retirees eligible for the state full pension receive £ 9,340 per year and spend £ 13,842 per year on average.

This represents a shortfall of £ 4,502 and without additional sources of income this group would have used up their income on Friday this week (3 September).

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Speculation is rife that the government could abandon the triple lock on the state pension, the promise to increase the state pension by the highest of the three measures – the rise in the index of consumer price (CPI), the increase in average incomes or 2.5%.

However, Just Group analysis reveals that even if the triple lockdown were implemented at 8%, single retirees would still face a shortfall of over £ 3,500 per year and almost £ 8,000 per year. retired couples, so that they reach the average. annual retirement expenses.

“If the average retired couple received full two state pensions on January 1, by now they would have spent the full amount and be dependent on other sources of income,” said Stephen Lowe, director of the group communication at Just Group.

“Single retirees would use their income a bit slower and exhaust a full state pension by the end of this week. The data reveals the shortcomings of the state pension for those who depend on it as their main source of income.

“It’s a reminder that postponing savings or opting out of an occupational pension plan can leave people struggling for income later in life.

“Those who are considering accessing cash pensions before they retire will also want to think about what that might mean for their income in a few years or decades.

“The government’s free, independent and impartial guidance service – Pension Wise – helps people approaching retirement better understand their options.

“Before digging into retirement savings, we urge everyone who is entitled to a free session on Pension Wise to use it.

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“Retirees struggling for an income need to make sure they claim their full entitlement to state benefits, as large amounts are not claimed every year.

“Our research shows that homeowners are particularly likely to miss out on potential income: four in ten eligible retired homeowners claim no state benefits, and an additional 20% miss out on all of their rights, losing hundreds of pounds a year by mean.

“A good source of online information is direct.gov.uk but Citizens Advice and other charities might also be worth contacting.

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