Martin Lewis has issued a stark warning about the state pension, highlighting that it may not be enough to cover even a basic standard of living in retirement. Speaking on his BBC podcast, the financial expert responded to a 48-year-old self-employed listener who had consistently paid National Insurance (NI) and wondered if it was too late to start a private pension.
Mr Lewis reassured the listener that beginning a pension at this stage was an “obvious thing to do”. He praised their NI payment history, noting that 35 years of contributions are typically required for the full new state pension, which currently pays £241.30 per week (£12,550 annually). At age 48, with around 30 years of contributions, the listener is close to qualifying for the maximum state pension and still has time to build up the remaining entitlement before retirement age, which could be 68 under current plans.
However, Mr Lewis emphasised that the state pension is designed to provide only a “subsistence living”. Data from Pensions UK shows a single person needs at least £13,400 a year for a basic retirement lifestyle – nearly £1,000 more than the full state pension offers. A couple requires £21,600 for a basic standard, while a moderate lifestyle would demand around £31,000 annually for a single person and £43,900 for a couple.
Given this shortfall, Mr Lewis stressed the importance of building additional retirement savings. “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. The expert urged listeners to consider private pensions to bridge the gap and ensure a more comfortable retirement.
