Most older adults in the UK are managing with almost £10,000 less than what is seen as a sufficient amount.
“adequate” retirement income
, research has revealed.

According to research conducted by financial advisor Quilter together with the Centre for Economics and Business Research (CEBR), the average retiree spends £22,140 annually.

This is much less than what could be expected
This does not come close to meeting the standards
This fails to meet expectations significantly
This is well below par
This lacks the necessary quality or depth
£31,700 annual benchmark
established by Pensions UK for a comfortable standard of living for an individual.

Meanwhile, numerous elderly individuals are subtly supporting the next generation.
gifting thousands
every year for children and grandchildren even with their own limited finances.

Steven Levin, CEO of Quilter, stated that the research shows these “are not luxurious periods, but rather active financial phases, and planning should take this into account.”

In this section, we examine what constitutes a “sufficient” retirement, how funds are utilized, and the reasons why numerous retirees believe they are struggling financially.

How a ‘sufficient’ retirement appears

Pensions UK — previously known as the Pensions and Lifetime Savings Association (PLSA) — calculates that an individual requires approximately £31,700 annually to maintain a middle-range standard of living, including basic necessities along with occasional extras like vacations and eating out.

A study conducted by Quilter, which surveyed 5,001 retired individuals, revealed that expenditure rates are significantly lower than this amount for the majority of families.

Where do retirees’ funds go?

The Retirement Spending Index indicates that expenses include £2,258 for housing, £2,222 for groceries, and £2,137 for vacations.
create the largest denomination notes
every year. However, optional expenditures continue to be substantial.

Older adults typically allocate around £1,985 toward home renovations, £1,579 for settling debts, and £1,374 on medical expenses annually, even with access to the NHS.

Interestingly, giving gifts to others takes up over 10 percent of yearly expenses, including £1,323 spent on family members and an additional £1,175 allocated for grandkids’ schooling.

Jon Greer, director of retirement policy at Quilter, stated: “Spending during retirement can vary over time, but it does not necessarily decrease universally.”

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Our index indicates that the typical retired person spends approximately £22,000 annually, with vacations, house renovations, and food accounting for the majority of their expenses.

Nevertheless, more than £2,500 has been set aside for presents and academic support intended for future generations.

Undoubtedly, depending on the ‘Bank of Mom and Dad,’ or for certain individuals, the ‘Bank of Grandma and Grandpa,’ is common.

Why individuals are not meeting expectations
Why people are failing to achieve their goals
Why people are underperforming
Why individuals are not reaching their potential
Why people are not living up to standards
Why people are missing the mark
Why individuals are falling below expectations
Why people are not fulfilling their responsibilities
Why people are not achieving desired outcomes
Why individuals are not matching expected performance levels

The study points out significant dependence on the state pension, accounting for 47 percent of earnings for individuals aged 70 to 74 and 50 percent for those above 80 years old.

For individuals classified under the “middle-aged stretch” group—defined by Quilter as retired people between 65 and 79 years old earning £35,000 or below—the state pension covers 52% of their earnings. The remaining portion is sourced from additional pensions or investment returns, as stated in the study.

Although it reported the average retirement household income at £35,000, significant regional disparities remain.

In Wales, 42% of pensioners state they have under £30,000 — which is the largest share in the UK, as opposed to the typical figure of £58,113 in London.

According to Mr. Levin, among older retirees, it could be that they had an underestimation of how large the fund needs to be in order to sustain their previous lifestyle, which has led to more people thinking about going back to work.

He stated: “There are wider consequences for future generations, particularly those who depend on the ‘Bank of Mom and Dad,’ or the ‘Bank of Grandma and Grandpa,’ to assist them in purchasing property or even kids seeking financial support from their parents as initial funding for their new businesses.”

It is evident that the elderly population plays a significant role in supporting family members’ financial goals, yet this assistance could decrease as seniors face increasing expenses, upcoming adjustments to pension benefits affecting inheritances starting in 2027, and restrictions on present gift limits.

Even though expenses remain at present levels, 51 percent of retired individuals worry they won’t be able to sustain their lifestyle for the coming year, with 18 percent expressing significant concern.

Mr. Levin stated that it is “disturbing” to observe numerous retired individuals who are greatly worried about their economic outlook.

Quilter has cautioned that with the reduction of defined benefit (DB) pension schemes, upcoming retirees might find themselves unable to assist younger people, possibly leading to broader economic consequences.

A representative from the government stated: “Our aim is for the state pension to serve as the base of income during retirement, guaranteeing seniors can lead lives filled with the dignity and respect they merit.”

That’s why we remain dedicated to the triple guarantee, as millions of retirees will have their state pension increased by as much as £1,900 during this parliamentary term.

We remain committed to enhancing pension savings through the restoration of the Pensions Commission, ensuring future retirees receive the respect and financial stability they merit.