State pension ‘not going to be enough’ – how Britons can get by in retirement

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The state pension is intended to support Britons after potentially decades of National Insurance contributions. At present, the full sum is worth £179.60 per week, but not everyone will receive this amount. This is because the full sum is usually only made available to those with 35 qualifying years of National Insurance contributions.

In order to get any state pension sum at all, Britons will need to have had 10 qualifying years on their record.

However, individuals should be aware that their state pension sum may not be enough to see them through retirement.

As a result, people may wish to consider alternative options as soon as they possibly can to ensure they are supported.

Ben Hampton, Retirement Advice Specialist at abrdn, commented on the matter.

He said: “The reality is the state pension alone is a lot less than the minimum wage for most people.

“It’s unlikely this will give you the kind of lifestyle you might have in mind for later in life.”

He encouraged Britons to look into boosting their potential retirement income in a number of ways.

Firstly, people may wish to contribute to a private or workplace pension arrangement.

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For the most part, these can be fairly flexible, and with workplace arrangements, an employer also makes contributions.

The sooner this is done by the person concerned, the better the outcome is likely to be.

This is due to the fact of compound interest which should see a pension grow and build up over a longer period of time. 

However, this is not the only option on the table for those who are planning towards retirement.

Saving into an ISA, formally known as an Individual Savings Account, is also a popular method.

The tax-free savings account currently permits deposits worth £20,000 per year, allowing individuals to build up a significant pot over time. 

Mr Hampton continued: “Taking some steps to boost your potential retirement income, perhaps by increasing contributions to a private or workplace pension or saving into an ISA, means your ‘future self’ will very likely thank you.

“In simple terms, a modern, flexible pension is a long-term savings plan and a tax-efficient way to save money. 

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“How much it grows over time will depend on how much you save, how your pension investments perform and how long you’re invested for.”

But for those planning ahead, how is it possible to understand what has been put away and whether it is enough?

Mr Hampton pointed Britons towards the tools they could potentially use to help.

He concluded: “It’s easy to check your state pension forecast on the Government website, and there are plenty of retirement calculators out there to help you.

“No matter how early you are in your career, or how early you are starting to think about retirement, it’s a good idea to think about how much income you think you might need in retirement. 

“This might include your accumulated pensions, and any other savings you might have.

“The earlier you think about, the earlier you can do something about it if you don’t think you will have enough.”

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