Millions of elderly people face a shortfall of up to £4500 a year between the state pension and their outgoings according to new research. The average pensioner household spends just over £10,000 each year on bills but the full basic state pension is just £5,881 annually, or £113.10 a month.
Pensioners who are lucky enough to have savings or a private pension can make up the difference but others risk having to cut back on food or heating in a desperate attempt to balance the books. Figures out this week reveal that 1.6 million of 10.8 million pensioners in the UK live in poverty. Of this number, around 900,000 are classed as being in severe poverty, having less than half the average household income. Figures from the Office for National Statistics shows that food is the largest bill for pensioners at £1,563 a year for the average household. Other large outgoings include rent and energy. In the South East, pensioners spend the most on basic essentials at £11,945 per year. In Wales, the average pensioner household is £8,829. A new flat-rate pension is also being introduced at a rate of £148.20 per week. However, there is still a £2,700 a year gap between the pension and the outgoings.
Dean Mirfin, group director at Key Retirement Solutions said:[quote] “This analysis shows how many pensioners will have to make harsh spending decisions unless they have other provisions such as savings or a private pension. [/quote]
One former mill worker said that he had seen the price of everything go up, whilst the money to pay for it did not increase.
Age UK pointed out that help is available in the form of Pension Credit. Pension Credit is vital in helping pensioners on low incomes as it provides a top-up to their basic pension, however it is estimated that one in three pensioners who are entitled to financial support do not know that they are.