One in five low-income pensioners ‘could not afford an emergency £200 bill’ (Image: Getty)
More than half (54%) of pensioners on low incomes struggle to keep up with bills and credit commitments, according to research conducted for the Living Wage Foundation. Three in 10 (30%) admitted they are in some level of debt, while just over a third (35%) said they rely on money from other sources, such as benefits or funds from friends, family, or a partner to get by.
A fifth (20%) confessed they could not afford an unexpected but necessary expense of £200, leaving them potentially vulnerable if, for instance, their washing machine or boiler broke down and needed replacing or repairing. The report included a quote from Sheila, a pensioner in her 80s, who said: « It’s tough, really tough. Everyone thinks older people are all rich, but it’s just not true. I’ve not turned my heating on for three years.
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More than half of pensioners on low incomes find it a struggle to keep up with bills (Image: Getty)
« I go running every day to keep warm in the winter and try to grow as many vegetables as I can in the summer. Our pension barely covers the basics, so there is no room for anything extra. »
She added: « When something breaks, the boiler, fridge, or I need a new pair of shoes, I panic, because I know I can’t just replace it. The constant stress and worry chip away at you. Living on my own also makes it harder. There’s no one to share bills with, no family to lean on.
« I would say, we pensioners are not asking for luxuries, we just want enough to get by. We worked, we paid in, and now we’re left to struggle. »
Nearly half (48%) have cut back on hobbies and entertainment, 43% have reduced spending on gifts or donations, and 24% said they can rarely, if ever, afford the non-essentials that make life enjoyable.
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Two-fifths (42%) of low-income pensioners considered themselves to have been middle—to high-earners for the majority of their working lives before retirement.
Meanwhile, 21% said they use their savings to cover everyday expenses, according to the survey, carried out by Savanta, among more than 500 people aged 66-plus across the UK in June.
For the research, individuals were defined as being on a low income if they were below the threshold for a « living pension ». Different thresholds were used to account for people’s varying living circumstances. For example, the monthly income threshold for a single homeowner was £1,162, but for a couple renting privately it was £2,489.
Over a quarter (26%) of those polled admitted that their income causes them significant anxiety, and 25% reported that it has negatively impacted their sleep.
The study also suggested that pensioners who rent or live alone are more likely to be in debt.
The study also suggested that pensioners who rent or live alone are more likely to be in debt. (Image: Getty)
A staggering 43% of renters were found to be in some form of debt, compared to just 23% of homeowners. A futher 40% of individuals living alone were in debt, as opposed to 25% of those cohabiting with a partner.
The research also discovered that a large proportion of those on low incomes rely on the state pension as their primary source of income, with 54% having no workplace pension to fall back on.
The Living Wage Foundation’s living pension accreditation is a voluntary savings goal for employers aiming to assist workers in accumulating a pension pot sufficient to cover at least their basic needs in retirement.
Employers committed to providing a living pension agree to offer a living pension savings level, using either a cash or percentage target.
More than 75 employers have received accreditation, including Everton Football Club, Aviva and L&G.
Katherine Chapman, director of the Living Wage Foundation, said: « These findings show the tough reality for too many pensioners who, after a lifetime of work, are still left without enough to live on. No one should be worrying about putting the heating on when it’s cold or boiling the kettle for a cup of tea. »
Samantha Brown, a managing partner at living pension employer Herbert Smith Freehills Kramer, said: « Tackling the retirement savings gap will require a multi-pronged approach: expanding access to workplace savings schemes, improving financial literacy, and encouraging consistent long-term contributions.
« The key to this lies in exploring innovative strategies and advocating for policy reforms that help build more resilient retirement outcomes for future generations. »
A Government spokesperson stated: « Supporting pensioners is a top priority and, thanks to our commitment to the triple lock, millions will see their yearly state pension rise by £1,900 this Parliament. We have also run the biggest-ever campaign to boost pension credit take-up, with over 57,000 extra pensioner households being awarded the benefit, worth on average around £4,300 a year.
« To ensure tomorrow’s pensioners will not be poorer than today’s, we are reviving the Pension Commission to tackle the barriers that stop too many people from saving. »
