Almost 7 million people over 50 at risk of poverty in retirement

Almost 7 million people aged over 50 have no private pension, putting them at risk of retirement poverty, according to the latest analysis by SunLife.

The report showed 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.

With the new state pension increasing by 8.5% to £221.20, SunLife says that it still falls well short of what is needed for pensioners to get by, let alone live well.

In February, Retirement Living Standards updated its calculations for what an individual needs for a ‘minimum standard of living’ in retirement, from an annual income of £12,800 to one of £14,400.

Even on the previous calculations, those living on the state pension alone were more than £2,000 short of achieving their basic needs in retirement, now, even when the increase is taken into account, the hike in living costs means they will be almost £3,000 short – £55 a week. And with more than a quarter (27%) of over 50s relying on the state pension alone, this puts almost 7 million people at risk of retirement poverty.

SunLife’s research found that, of those over 50s who have no private pension savings, nine in ten (92%) admit to being worried about money.

More than eight in ten (85%) are concerned about the rising cost of living, more than half (55%) have a ‘fear’ of sudden unexpected costs, while four in ten (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 nowhere near 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 2023’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.”