Single people need to accumulate significantly more personal investments and savings in order to achieve the same standard of living in retirement as couples, says Just Group.
Analysis by the retirement specialist showed single pensioners face a ‘premium’ of thousands of pounds because they cannot share basic living costs with a significant other.
Those with a full state pension of £11,502 a year face a shortfall of around £2,897 a year income to achieve the £14,400 ‘minimum’ retirement living standard as calculated by the Pensions and Lifetime Savings Association.
However, a couple who are both receiving full state pensions will have achieved the ‘minimum’ retirement standard living of £22,400 and have an additional £604 a year income on top.
Stephen Lowe, group communications director at Just Group, said that for a single 65-year-old to secure the £2,897 a year income after tax to meet the minimum income standard, it would require a pension fund of around £50,000. In contrast, the couple will have already achieved the minimum income standard from state pension but any small amount of pension will boost their incomes higher, giving an even higher standard of living.
Lowe said: “Small pension funds tend to be seen as a problem that many people solve by withdrawing the money the first chance they can. For many people those small pension funds will make the difference between not quite having the spending power to reach the minimum retirement living standard or being able to surpass it and enjoy more treats.”
Main image: aaron-andrew-ang-jXMGrVYHpK0-unsplash
