Pensioners in the UK are facing a significant shortfall in their retirement income, according to new research.
Just Group are sounding the alarm that payments fall nearly £20,000 a year short of meeting the moderate Retirement Living Standard set by the Pensions and Lifetime Savings Association (PLSA).
This gap has led to the concept of "state pension shortfall day", which marks the point in the year when a pensioner relying solely on the state pension would theoretically run out of money if living to the minimum standard.
Despite recent triple lock increases, analysts claim the retirement benefit remains insufficient to support even a basic retirement lifestyle.
The PLSA defines the minimum Retirement Living Standard as covering all of a pensioner's needs, with some left over for leisure activities.
This includes a one-week holiday in the UK, eating out about once a month, and affordable leisure activities twice a week.
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Experts have warned the state pension will not sustain the kind of retirement people needGETTYHowever, the full new state pension falls short of meeting even this basic standard with the gap between the Department for Work and Pensions (DWP) benefit and the minimum standard being £3,000 annually.
For those aspiring to moderate or comfortable retirement standards, the shortfall is even more significant.
The PLSA estimates that pensioners would need to generate annual incomes of £19,758 and £31,558 respectively to achieve these higher living standards.
Those relying solely on the state pension would face running out of money much earlier in the year if their spending aligned with moderate or comfortable standards.
As it stands, the full new state pension is nearly £20,000 lower than the income required to support a moderate standard of living.
Stephen Lowe, group communications director at Just Group, urged those approaching retirement to be aware of how far their pension pots will take them in later life.
He explained: "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."
Lowe emphasised the growing importance of pension adequacy and the need for long-term planning.
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Questions are being raised over the support on offer from the current range of pension benefits
GETTYHe noted that people often struggle with long-term planning, focusing instead on near-term events.
Furthermore, he stressed the need to simplify long-term financial planning for individuals.
"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," he said.
Chancellor Rachel Reeves is expected to outline potential pension reform in her Autumn Budget on October 30.
