State pensioners warned they face a £2,858 annual shortfall

Over one million Britons face a £2,858 annual shortfall in their retirement income, new research shows.

A state pension warning has been issued as millions look set to "run out of money" and could face a staggering £2,858 a year shortfall in retirement. Over one million Britons face a £2,858 annual shortfall in their retirement income, new research shows.

The full new Department for Work and Pensions (DWP) state pension of £11,542 for 2024-25 falls significantly short of the £14,400 annual income required to achieve even a basic lifestyle in retirement. It means anyone who has just the state pension to live off would run out of cash today, according to Just Group.

Stephen Lowe, group communications director at retirement specialist Just Group, said: "At a time when Government support for retirees’ finances is under scrutiny, State Pension Shortfall Day marks the day in the year when a pensioner living to a ‘minimum’ standard would theoretically run out of money if their only source of retirement income was the State Pension.

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"Despite two successive, significant increases, the full new state pension still falls nearly £3,000 a year short of meeting the minimum of the PLSA's Retirement Living Standards and is nearly £20,000 lower than the income required to support a moderate standard of living."

Mr Lowe continued: "The state pension remains a fundamental building block of retirees’ annual retirement income but for many people this level of income will not provide the resources to sustain the kind of retirement they need.

"People have an aversion to long-term planning and find it easier to focus on near-term events, but we need to make it simpler for them to see the consequences of how their saving habits can support them in later life. Pension adequacy is a topic growing in importance."

Pete Glancy, head of pensions policy at Scottish Widows warned: "It is likely to be a long time before Britain has been saving enough to give future pensioners the outcomes they hope for. In the meantime, helping people to make the very most of what they have is going to be critical."