Being retired costs nearly £230 a week, according to research, leaving those relying on the state pension alone facing a significant shortfall.


Retirement in the UK costs an average of £11,830 a year, analysis by equity release adviser Key found, yet the full basic state pension provides an income of £168.60 a week, or £8,767 a year.

This means the average pensioner needs an additional £3,063 a year on top of the state pension to cover their living costs once they stop work.

Separate research by Nationwide Building Society found that one in three (33%) middle-aged people in the UK expect to survive solely on their state pension when they retire. Just four in 10 (40%) have a private pension in place to supplement income from their state pension.

Regional differences

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Those in the South East typically face retirement costs which are thousands of pounds higher than those living in the North and Midlands.

The average cost of retirement for a pensioner in the South East is £14,270 a year, compared to £10,280 for those living in the West Midlands.

Other areas of the country where retirement costs are lower than the national average include Wales, Northern Ireland and the North East of England.

Biggest retirement costs

Two of the biggest weekly costs in retirement are utility bills and food, according to Key’s research, with both accounting for 20% of spending. Both set pensioners back around £2,370 a year on average.

Transport, including the cost of running a car, makes up around 16% of annual bills, while spending on entertainment costs around 23%.

Will Hale, chief executive at Key, said: “With retirees needing 35% more than the full state pension provides, people need to think carefully about how they will bridge this gap.

“Workplace and private pensions as well as savings and investments can help but for most people maintaining a decent standard of living in retirement means maximising all sources of income.”

Boosting retirement income

There are several ways to boost your retirement income if the state pension isn’t enough to cover your costs.

First, check whether you’ve got any pensions that you might have forgotten about, as they can be easy to lost track of, especially if you’ve moved or worked for several different employers over the years. You can find contact details for workplace of personal pension schemes at

Many people who don’t have any private pensions choose to work part-time once they reach retirement age if their employer allows it, or to set up their own business to bring in some extra cash.

An alternative option for those who have much of their wealth tied up in their property is to consider downsizing to free up some funds or releasing some equity. However, always seek professional advice if you’re considering taking this route, as equity release won’t be right for everyone and may affect your entitlement to state benefits.


If you have a spare room, you could consider renting it out to a lodger to boost your retirement income. Under the government’s ‘rent a room’ relief, you can bring in up to £7,500 a year tax-free by letting out a furnished room in your home.