The state pension is a payment people claim at an eligible age, and is different to a workplace or private pension. Although the weekly sum is forecast to rise above £200 a week in 2025, Brits are being urged to boost their retirement savings. The new state pension is already set to rise by 2.5 percent from April, meaning it’ll rise by £4.40-a-week to £179.60 – a hike of £228.80 over the course of a year. Meanwhile, the old basic state pension will increase by £3.40-a-week to £137.65 – giving pensioners an extra £176.80 over 12 months.
But experts are warning that the £179.60-a-week will leave many stretched, and argued people may need to work to make up for it.
Becky O’Connor, head of pensions and savings at Interactive Investor, told The Sun: “Anyone who assumes the state pension will cover their living costs when they retire is set for disappointment.
“It might be enough to scrape by but it won’t be enough to ‘enjoy’ your latter years in the way many of us like to think of retirement.
“The reality for many who only have the state pension to look forward to is more years of working to supplement it.”
Clare Julian, wealth manager at JM Finn, also told Express.co.uk recently: “People should be under no illusion that [the state pension] is ever going to be enough for your life in retirement.
“The UK population is chronically underfunded, and I think people just don’t realise how much you’ll need in order to get the lifestyle you want or need in retirement.
“You’re going to be retired for a long time, life expectancy is on the up, and you really do need to take this into account.”
The Pensions and Lifetime Savings Association (PLSA) suggests that people can try and turn their pension into an annuity, which pays you a guaranteed annual income for life in retirement.
This isn’t always the right option for everybody but the PLSA says that if you do take this option, you will need to spend around £33,000-a-year as a singleton or £47,500 as a couple.
Experts also suggest you can build up your pension by boosting your contributions, setting up your own pension, or ensuring you are not missing out on tax relief.
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“I do expect he will be making further changes which could be of a detailed and wide-ranging nature. We shouldn’t’ assume that because he didn’t announce things yesterday, he won’t be thinking about them as longer term measures.
“We have got a manifesto commitment on the pension triple lock and tax triple lock, with all of these locks he’s got more locks than Houdini to grapple with.
“At some point, the Government might decide we have to be open with the public and say, ‘If we stick with these manifesto commitment we will have too many restrictions to do what is right to do.’
“He’s not done it so far, but in future there may come a time when he has to level with the public.”