- Pensioners on a low income are facing growing financial insecurity in retirement.
- More than half struggle to cover their bills.
- Many rely on benefits, family support or dip into savings just to get by.
- Things are worse for renters, those living alone and those with health conditions.
- Rising living costs are taking away the comfort people expected from their “golden years”.
Over half (54%) of pensioners on a low income find it a struggle to keep up with bills and credit commitments, causing misery and worry to hundreds of thousands of retirees. The findings are revealed in new research by the Living Wage Foundation based on polling of pensioners who are on a low income.
Struggling to keep afloat
The polling found that many have no financial buffer:
- 1 in 3 (35%) rely on money from other sources such as benefits, or money from friends, family or a partner.
- Nearly 1 in 3 (30%) are in some level of debt.
- 1 in 5 (21%) use their hard-earned savings to cover everyday expenses.
- 1 in 5 (20%) say they couldn’t afford an unexpected but necessary expense of £200, making them vulnerable to even more hardship if, for instance, their washing machine or boiler broke down and needed replacing or repairing.
For some, life has become unmanageable. One in seven (14%) reported falling behind with bills or rent, taking out payday loans to cover essential costs, being unable to heat their homes or regularly skipping meals in the past year.
The financial strain is taking a toll on wellbeing, with 26% saying their income makes them more anxious and 25% reporting it has worsened their sleep.
Some groups are hit harder
Pensioners who rent or who live alone are significantly more likely to be in debt, fall behind on bills or struggle with unexpected costs:
- 1 in 4 (24%) renters had fallen behind with bills or rent, been unable to afford heating or regular meals, or taken out a pay-day loan to cover essentials.
- 43% of renters were in some level of debt compared to 23% of homeowners.
- 40% of people living alone were in debt compared to 25% of people living with a partner.
- 34% of people living alone said they couldn’t afford an unexpected but necessary expense of £200 compared to 14% of people living with a partner.
- 31% of renters compared to 15% of homeowners said they wouldn’t be able to meet a £200 unexpected cost.
No golden years
Retirement for many on a low income is also far from the “golden years” people hope for where they can pursue hobbies and engage in leisure activities:
- Nearly half (48%) have cut back on hobbies and entertainment.
- 43% have reduced spending on gifts or donations.
- Almost a quarter (24%) say they can rarely, if ever, afford the non-essentials that make life enjoyable.
Just because you were well-paid in your working life doesn’t necessarily mean you can look forward to a comfortable retirement either. 42% of pensioners on a low income considered themselves to be middle- to high-earners for the bulk of their working lives before retirement. Rising living costs combined with reduced income means 2 in 5 (40%) retirees on a low income say they are struggling more now than when they were working.
Most pensioners on a low income are reliant on the State Pension as their main source of income with more than half (54%) having no workplace pension to draw on. Pensioners with a workplace pension, even if on a low income, are less likely to be struggling. Over half (56%) of those who aren’t struggling to keep up with bills and credit commitments have a workplace pension, compared to just over a third (37%) of those who are struggling, highlighting the need for stronger employer contributions.
The Living Wage Foundation’s Living Pension accreditation is a voluntary savings target for employers who want to help workers build up a pension pot that will provide enough income to meet basic everyday needs in retirement. Living Pension Employers commit to providing a Living Pension savings level, using either a cash (£2,950) or percentage (12%) target. There needs to be a minimum of 7%, or £1,720, contribution from the employer. Businesses signing up to the Living Pension can expect to be rewarded with improved recruitment and retention, with 82% of employees at Living Pension Employers saying that an employer’s pension scheme was important when considering a new job. There are now over 75 accredited Living Pension Employers including Everton Football Club, Aviva and L&G.
Sheila, a pensioner in her 80s, said: “It’s tough, really tough. Everyone thinks older people are all rich, but it’s just not true. I’ve not turned my heating on for three years. I go running every day to keep warm in the winter and try to grow as many vegetables as I can in the summer. Our pension barely covers the basics, so there is no room for anything extra. The hardest trade-offs have been between heating and eating because that’s what it comes down to in the winter. When something breaks, the boiler, fridge, or I need a new pair of shoes, I panic, because I know I can’t just replace it. The constant stress and worry chips away at you. Living on my own also makes it harder. There’s no one to share bills with, no family to lean on. I would say, we pensioners are not asking for luxuries, we just want enough to get by. We worked, we paid in, and now we’re left to struggle.”
Katherine Chapman, Director of the Living Wage Foundation, said: “These findings show the tough reality for too many pensioners who, after a lifetime of work, are still left without enough to live on. No one should be worrying about putting the heating on when it’s cold or boiling the kettle for a cup of tea. The good news is, there’s a simple way that employers can play their part in tackling pensioner poverty. Our Living Pension standard sets out the contribution level needed for a decent standard of living in retirement and it’s been brilliant to see more and more employers signing up so that their employees can look forward to a retirement with dignity and security.”
Samantha Brown, UK & EMEA managing partner, employment pensions & incentives at Living Pension Employer Herbert Smith Freehills Kramer, says: “As the UK population grows older are we about to see the 'bank of Mum and Dad' replaced by 'Savings of Siblings' with many pensioners reliant on their family for financial support?
"The reality is that a significant portion of the population is not on track to fund a secure retirement. Little wonder that trustees and pension funds are increasingly concerned about the long-term implications of this trend. Tackling the retirement savings gap will require a multi-pronged approach: expanding access to workplace savings schemes, improving financial literacy, and encouraging consistent long-term contributions. The key to this lies in exploring innovative strategies and advocating for policy reforms that help build more resilient retirement outcomes for future generations.”
Read the report: Life on a low pension | Living Wage Foundation
Notes on the data
Data is Living Wage Foundation analysis of Savanta polling. The data comes from a survey of 533 people living in the UK aged 66+ carried out between 13-23 June 2025. Savanta is a member of the British Polling Council and abides by its rules.