Martin Lewis has issued a stark warning about the state pension, highlighting that it may fall short of covering even a basic standard of living in retirement. Speaking on his BBC podcast, the financial expert responded to a listener's query about retirement planning, emphasising the importance of building additional savings.
The listener, aged 48 and self-employed, had consistently paid National Insurance (NI) and wondered if it was too late to start a private pension. Lewis reassured them that starting now would be beneficial, calling it an 'obvious thing to do'. He noted that with 35 years of NI contributions needed for the full new state pension, the listener might already have around 30 years' worth, putting them close to the maximum entitlement of £241.30 per week.
However, Lewis pointed out that the state pension is designed only for subsistence living, not a comfortable retirement. The full new state pension provides roughly £12,550 annually, but data from Pensions UK shows a single person needs £13,400 for a basic lifestyle—nearly £1,000 more. For a moderate lifestyle, a single person would require about £31,000 per year, almost three times the state pension amount.
Lewis urged people to save into private pensions to maintain their working-life standard. 'So it is always good if you can, if you want to live more akin to the style that you have had in your working life, to be putting some money into your pension,' he said.
