People over 45 warned as DWP state pension is 'less than needed' for basic living (2025)

Most people aren’t aware of the reality they’re retiring in, with many Gen X residents in the UK set to be very unprepared when they do decide to retire from their careers

Experts are sounding the alarm for UK adults, especially those over 45, to become more vigilant and take action regarding their pension knowledge. A recent survey by Standard Life has highlighted a worrying gap in understanding about the state pension.

The findings show that 51% don't know the amount they will receive from state pension payments, and 32% are uncertain about the age at which they get these funds. Standard Life's latest Retirement Voice report revealed the misunderstanding is deepest among Gen X, currently aged between 45 and 60.

This group expects to have £100,000 or less in their pension pot upon retirement. This falls short of the minimum required for a basic standard of living during retirement years, with the state pension alone also not meeting the minimum.

Dean Butler, Managing Director for Retail Direct at Standard Life, commented on the issue: "The state pension only covers a very basic lifestyle. Less than is needed for a minimum standard of living in retirement, according to the Pensions and Lifetime Savings Association."

He further stressed the importance of considering the state pension as just one component of a comprehensive retirement strategy: "The reality is there's a significant gap between what you get from the state pension and what you may actually need or want in retirement. It should therefore only form part of your overall retirement plan."

To put it into perspective, the Pensions and Lifetime Savings Association has calculated that an annual income of £14,400 is necessary for a single person to maintain a minimalistic lifestyle in retirement, while a couple would require £22,400. For those aiming for a comfortable retirement, the figures rise to £43,100 for singles and £59,000 for couples annually.

In comparison, the new state pension is worth £11,973 annually and the basic old one at £9,166.80 per year. However, according to a 2023 report by Royal London, only about half the individuals eligible for the new state pension are receiving the full amount.

The expert urged people to familiarise themselves with their state pension entitlements. By visiting Gov.uk, you can find out the amount you're owed in state pension and when you're entitled to start claiming it using online tools.

Dean pointed out that close to a million could be in the dark about receiving incorrect state pension sums. He elaborated: "Around 750,000 people are not receiving the correct state pension amount either due to errors in National Insurance records or the Department of Work and Pensions (DWP) not making adjustments when there's a change to your circumstances."

He further advised: "If you've spent time raising children and were not in paid employment make sure to check that you have received NI credit for this period. For women whose husbands retired after March 17, 2008, make sure to check your entitlement to ensure that it was increased appropriately, and if you are over 80 and on a low pension, check that the DWP has assessed you for the over 80's rate."