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Pension pays less than £10,000 a year for majority

16 July 2008 / by Rebecca Sargent
Almost two thirds of Britain's single pensioners receive an annual income of less than £10,000 from their pension, the latest information from the Office for National Statistics (ONS) has revealed.

The figures showed that of those living on a low income, the majority are women. Meanwhile 45 per cent of pensioner couples are living on a total pension fund of as little as £15,000 a year.

The ONS statistics also show that only around two thirds of all pensioner households have an income in the form of a private pension. However, of those who do have a private fund, more than half of single men and women had accrued a total less than £5,000.

Commenting on the latest statistics, Joe Harris, general secretary at the National Pensioners Convention, said: "The latest figures show that 1 in 4 pensioners already live below the poverty line of £151 a week – 62 per cent of pensioner couples get by on £10,000 or less each a year and it looks as if future generations will be even worse off than their parents and grandparents.

"Rising fuel, food and council tax bills are pushing people further into financial hardship, yet the Government's answer to this looming pensions; crisis is to tell people to work longer, by raising the age of retirement to 68."

Talking of the struggle it takes to save for an adequate pension, Mr Harris added: "Most financial experts agree that you need a pension pot of about £100,000 to provide an income in retirement of around £6,000 a year, but millions of today's worker – even those in occupational pension schemes – will not get anywhere near this amount.

"The Government's entire pensions' policy has relied on means-tested benefits and good company pensions to take people out of poverty in retirement – but this approach is now beginning to unravel."

Meanwhile, as the UK stock market takes a dive, so too have Britain's final-salary pension schemes. It has been reported that £45billion was wiped off the value of the majority of final-salary pension schemes in June, according to the Pension Protection Fund.

© Fair Investment Company Ltd