With the Cost-of-living crisis hitting all UK residents, one segment of those affected are those retired on a state pension. With a fixed income, they may be hit hardest by the recent rise in prices, and are more likely to be unable to supplement it due to infirmity. According to the Pensions and Lifetime Savings Association (PLSA), pensioners need to spend an extra £2000 just to achieve a basic standard of living.
A single person would need a minimum of £12,800 to cover their basic needs. Last year the average cost was £10,900. The PLSA claims that pensioners relying on state pensions, who represent a sizeable proportion of those on minimum living standards, are being hit the hardest because most of their budget is spent on the main components behind the rise in inflation, namely food and the rising cost of energy.
The PLSA’s report has calculated that a retired couple will need a minimum income of £19,900 pa to meet the minimum standard – a 19% rise over 2021. If you are retired or approaching retirement, you may be concerned as to how the cost-of-living increases will affect you, or if you have an outstanding mortgage or other borrowings, how the increases will affect those greater financial concerns.
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Sources:
1 – Pensions and Lifetime Savings Association (2023). Rising Prices Add Almost 20% to “Minimum” Cost of Retirement. Available at:
https://www.plsa.co.uk/presscentre/news/article/rising-prices-add-almost-20-to-minimum-cost-of-retirement [Accessed 24 Jan 2023]
All the information in this article is correct as of the publish date 26 January 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.
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