Living costs are rising in retirement, and although the state pension has increased this year, inflation has eaten away at purchasing power. However, how far retirement cash will stretch could impact people differently depending on numerous factors.
One of these could be the location in which a person lives in the UK, as a study has found the cheapest and most expensive places to retire this year.
London, Brighton and Reading have been found to be the most costly places to spend later life, according to NerdWallet.
Conversely, it is cheapest to retire in Hull, Aberdeen and Belfast according to the study.
The findings showed Londoners are likely to have none of their pension left after paying for their living costs.
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“These findings do show the struggle facing anyone reliant solely on the state pension to fund their retirement.
“It highlights that people would benefit from additional pensions or other sources of income on top of their state pension, not only to help them have a more comfortable retirement but, in many cases, just to meet their living costs.
“What also needs to be considered is that any rent or mortgage repayments that are still payable in retirement have not been included, and these will put further pressure on retirement incomes.
“Calculations can be made to estimate how much, factoring in inflation, people will likely need to contribute to their private pension each month if they are to achieve the retirement income they want; this is often a good starting point.”
Mr Eagling acknowledged the figures are a rough guide in terms of the cost of living and the amount of pension many people may receive.
Indeed, the calculations also do not include any additional state pension a person may be entitled to if they are on the older state pension scheme.
Some individuals may also receive protected pension payments if they are entitled to more than the full new state pension.
If a person was contracted out before April 6, 2016, they could get less than the full new state pension.
Mr Eagling concluded by suggesting individuals seek independent financial advice if they require assistance with retirement planning.
In addition, individuals should also check whether they are eligible for benefits to help them, as this could supplement their state pension income.
A DWP spokesperson told Express.co.uk: “The state pension continues to provide the foundation for retirement planning and financial security in older age, with the full yearly amount of the basic state pension now over £2,300 higher than in 2010.
“Alongside this, Automatic Enrolment has succeeded in transforming private pension saving.
“A record number of Brits are now saving for retirement – more than 10million workers have been enrolled into a workplace pension since its introduction, with an additional £28billion saved in 2020 compared to 2012.”