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A new report from the Office for National Statistics (ONS) the average weekly expenditure for households aged between 65 and 74 was £455.30 in 2021/22. In total, that’s approximately £23,000 each year.
Meanwhile, households, where the head is aged over 75, had an average weekly spend of £356.30 per week. This amounts to roughly £18,500 per year.
This compares to an overall average weekly spend across all households of £528.80, reports the Daily Record. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown warns that despite the 10.1 per cent increase to State Pension payments this year, they still come “nowhere near meeting our retirement income needs”.
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A full new State Pension (introduced in 2016) is worth around £10,600 per year and a full Basic State Pension (pre-2016) is £8,100. Ms Morrissey has previously warned many people do not receive anywhere near the full amount of State Pension.
She also explains that there are currently 1.8m people receiving less than £100 per week – with the vast majority of those women who have accrued large gaps in their National Insurance contribution history due to time taken away from the workforce to care for family.
Ms Morrissey said: “State Pension incomes may have surged this year but still come nowhere near meeting our retirement income needs. Spending tends to fall sharply as we get older as you may go out less and you may not drive as much as you once did.
“Many over-65s will have their retirement incomes bolstered by final salary pension provision but those who don’t face real challenges and those of us still working need to plan if we are to have enough to live well in retirement.”
Data taken from Hargreaves Lansdown’s Savings and Resilience Barometer models the percentage of households on track for a moderate retirement income – this equates to around £23,000 per year for a single person according to calculations from the Pensions and Lifetime Savings Association (PLSA). However, only around 42 per cent are currently on track to meet this goal.
Ms Morrissey continued: “If you are in a couple where you both get a full State Pension then this helps enormously. But if you are single, or still paying significant housing costs then if you don’t have a decent retirement savings, you’ll be struggling to meet anything more than your most basic needs.”
The ONS figures cover the 21/22 financial year and don’t really take into account the eye-watering increases in costs we saw as inflation rose last year. Ms Morrissey said that next year’s figures will “no doubt show the huge surge in the basics such as gas, electricity and food that we have all been grappling with”.
Financial support for people over State Pension age
Pension Credit tops up a person’s income to a minimum of £201.05 per week for single pensioners and up to £306.85 for couples – or more if a person has a disability or caring responsibilities.
The Department for Work and Pensions (DWP) launched a Pension Credit awareness campaign in April 2022 and is continuing to promote the income-related benefit throughout 2023. Some 1.4 million older people are currently in receipt of the ‘passport’ benefit which in turn is providing additional financial support for 1.6 million pensioners and their spouses or partners.
Below is everything you need to know about the benefit to make a claim for yourself, a family member or friend.
Who should check for Pension Credit?
If you are over 65 and reached their State Pension age before April 6, 2016, you could still qualify for Pension Credit if your weekly income is less than:
- £240.90 if they are single
- £351.45 if they are a couple
People can check their eligibility for Pension Credit using the online calculator here or by calling the Pension Credit helpline on 0800 99 1234.
What is Pension Credit?
Pension Credit currently gives 1.4 million people across the UK extra money to help with living costs if they are over State Pension age and on a low income.
Some older people think because they have savings or own their home they would not be eligible for any Pension Credit, but the DWP said hundreds of thousands could be missing out on the extra money and discounts it provides every month.
Other help if you get Pension Credit
If you qualify for Pension Credit you can also get other help, such as:
- Housing Benefit if you rent the property you live in
- Support for Mortgage Interest if you own the property you live in
- Council Tax discount
- Free TV licence if you are aged 75 or over
- Help with NHS dental treatment, glasses and transport costs for hospital appointments
- Help with your heating costs through the Warm Home Discount Scheme
- A discount on the Royal Mail redirection service if you are moving house
Mixed aged older couples and Pension Credit
In May 2019, the law changed so that a ‘mixed age couple’ – a couple where one partner is of State Pension age and the other is under it – are considered to be a ‘working age’ couple when checking entitlement to means-tested benefits.
This means they cannot claim Pension Credit or pension age Housing Benefit until they are both State Pension age. Before this DWP change, a mixed age couple could be eligible to claim the more generous State Pension age benefits when just one of them reached State Pension age.
How to use the Pension Credit calculator
To use the calculator on GOV.UK, you will need details of:
You’ll need the same details for your partner if you have one.
You will be presented by a series of questions with multiple choice answer options.
This includes:
- Your date of birth
- Your residential status
- Where in the UK you live
- Whether you are registered blind
- Which benefits you currently receive
- How much you receive each week for any benefits you get
- Whether someone is paid Carer’s Allowance to look after you
- How much you get each week from pensions – State Pension, private and work pensions
- Any employment earnings
- Any savings, investments or bonds you have
Once you have answered these questions, a summary screen shows your responses, allowing you to go back and change any answers before submitting. The Pension Credit calculator then displays how much benefit you could receive each week.
All you have to do then is follow the link to the application page to find out exactly what you will get from the DWP, including access to other financial support.
There’s also an option to print off the answers you give using the calculator tool to help you complete the application form quicker without having to look out the same details again. Try the Pension Credit Calculator for yourself or family member to make sure you’re receiving all the financial support you are entitled to claim.
Who cannot use the Pension Credit calculator?
You cannot use the calculator if you or your partner:
-
are deferring your State Pension
-
own more than one property
-
are self employed
-
have housing costs (such as service charges or Crown Tenant rent) which are neither mortgage repayments nor rent covered by Housing Benefit
How to make a claim
You can start your application up to four months before you reach State Pension age. You can claim any time after you reach State Pension age but your claim can only be backdated for three months.
This means you can get up to three months of Pension Credit in your first payment if you were eligible during that time.
You will need:
-
your National Insurance number
-
information about your income, savings and investments
-
your bank account details, if you’re applying by phone or by post
If you’re backdating your claim, you’ll need details of your income, savings and investments on the date you want your claim to start.
You can use the online service if:
To check your entitlement, phone the Pension Credit helpline on 0800 99 1234 or use the GOV.UK Pension Credit calculator here to find out how much you could get.
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