The number of Brits aged over-50 relying on the state pension to fund their retirement is set to rocket from 1.2 million to 6.25 million according to LV=.

In its State of Retirement Report, which detailed retirement information from 1,559 British adults, LV= stated that the reliance on the state pension will leave the majority retiring on less than the minimum wage.

Figures showed that the average annual income of someone relying on the state pension combined with additional state pension income and pension credit is £9,672. In comparison, someone in the UK working full time on the minimum wage could expect annual earnings of £11,477.

The report also highlighted concerns around the level of cut backs in contributions to long term savings. In total, 15 per cent of those retired or who are within five years of retirement have cut back contributions in the last year.

LV= head of pensions Ray Chinn commented that people should think of their pensions as a “retirement wage.”

“If more people reflected on their pension as a “wage” that they will potentially be relying on for over two decades, they might feel more inclined to plan ahead,” he said.

Concerning the coalition government’s pension reforms, such as the increase in retirement ages, Chinn stated that although “very few are supportive of the government’s reforms”, they are indeed a “necessary evil”, in the face of increased demographic challenges.

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