The cost of living crisis is currently ongoing with bills expected to rise further, warns Martin Lewis.
Appearing on Good Morning Britain (GMB) this morning (January 16), the financial guru said that "energy bills are set to rise before they fall" with a rise expected in April of this year.
And with this in mind, despite a State Pension rise of 10.1 percent, also happening in April 2023, millions of pensioners will be left only able to cover the bare minimum.
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The annual income needed for a minimum standard of living in retirement has jumped by nearly a fifth in just one year, according to The Pensions and Lifetime Savings Association (PLSA).
And according to According to Leicester Live, in its latest inflation update, the PLSA have said that the cost of a 'minimum lifestyle' has increased from £10,900 in 2021 to £12,800 in 2022 – or 18 per cent – for a single person. For a couple, it has risen from £16,700 to £19,900, 19 per cent.
Rising food and fuel prices have contributed significantly to the increase retirees need for a minimum standard of living, the PLSA said. The disproportionate increase in the cost of retirement, means it is more important than ever the UK Government retains the triple-lock mechanism the PLSA argues.
This year, State Pension is set to rise with inflation having been temporarily scrapped by former chancellor and current prime minster Rishi Sunak, from 2021 to 2022. The system means that it will increase by 2.5 per cent each year with average earnings growth or inflation - depending on which is the biggest.
Minimum amount needed for comfortable retirement
The new full State Pension is £185.15 per week however some many qualify for the whole amount as it requires 35 National Insurance contribution years. According to PLSA, even the full new State Pension would not be enough to achieve a comfortable standard of retirement living for a couple.
The PLSA have outlined example incomes for couples and how they place in the three retirement living categories of minimum, moderate, and comfortable:
Minimum: £96 per week to spend on food and £12 on alcohol. No car. A week’s holiday and a long weekend in the UK every year. £460 per person annually for clothing and footwear.
Moderate: £127 per week to spend on food and £20 on alcohol. A three-year-old car replaced every 10 years. Two weeks' holiday in Europe and a long weekend in the UK annually. £791 for clothing and footwear per person annually.
Comfortable: £238 per week to spend on food per week and £26 on alcohol. Two cars, replaced every five years. Three weeks' holiday in Europe annually. Up to £1,300 per person for clothing and footwear annually.
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