State Pensions Increase – What to Do If You Haven’t Got One

Following news that state pensions will be increasing by 8.5% next year due to the triple lock, many find themselves pondering their financial security as retirement approaches. The looming question of maintaining a comfortable lifestyle without a pension can be daunting. So, the financial wellbeing experts at caba have explored the options available to those who do not have the safety net of a pension for retirement.

Screenshot 2023-09-15 at 14.34.46.png

According to the Pension Policy Institute, a concerning number of people are not saving enough to ensure a financially stable retirement. This is a concern that caba frequently encounters, with numerous individuals seeking advice on managing their debts and overall finances during their retirement.


Several factors can lead to the absence of a pension fund:

  • Self-Employment or Unemployment: Many individuals, like caba, may be self-employed or facing periods of unemployment, making it challenging to contribute to a pension.
  • Reduced Income (Part-Time Work): Working part-time can limit one’s ability to save for retirement.
  • Bankruptcy: Experiencing financial setbacks, such as bankruptcy, can disrupt pension savings.
  • Health Issues: Health problems that hinder work or financial planning for retirement can also be a barrier to pension savings.
  • Care Responsibilities: Providing care for dependents or receiving care oneself can redirect financial resources away from pension savings.


Given these challenges, individuals often wonder how much they need to save for a pension. Financial institutions like HSBC Bank offer a rule of thumb: Start by halving your age and use that number as the percentage of your salary to save each year. For instance, if you begin saving for retirement at age 20, aim to save 10% of your annual income. This percentage increases with age, ensuring that you allocate a larger portion of your income to retirement savings as you get older.

Citizens Advice recommends creating a pension planning checklist. This checklist helps individuals consider their desired retirement lifestyle compared to their financial obligations, including mortgage payments, partner’s expenses, and energy bills.

For those who haven’t secured a pension, here are some steps to consider:


  1. Review Your Situation: It’s crucial to acknowledge the impending change in your financial circumstances as retirement approaches. While everyone is eligible for the state pension, those who have not met the minimum National Insurance contributions will receive a basic state pension of £130, which can be supplemented. Use a benefits calculator to assess your state pension entitlement and explore additional benefits you may qualify for.


  1. Reduce Your Outgoings: Living on a limited budget necessitates a review of your lifestyle. Even minor adjustments to your spending habits can lead to significant reductions in overall expenses. Consult resources like MoneyHelper to determine your retirement needs and evaluate income options.


  1. Consider Continuing to Work: Increasingly, individuals opt to work longer rather than retire. The number of people aged 60 to 75 who remain in the workforce has risen by over 7% since 2001. Government figures shared a significant shift in the average retirement age, with men retiring at 65.2 years old in 2020, up from 63.3 years old in 2000, and women retiring at 64.3 years old in 2020, up from 61.2 years old in 2000.

Delaying your pension can have advantages. For every nine weeks you defer taking your state pension, it increases by 1%. This means that if you defer for a year, your pension will receive a 5.8% boost, as highlighted by The Money Advice Service.

If you are an existing or former ICAEW accountancy member or a close family dependent, caba can provide support regarding your financial health, regardless of the scale of your financial concerns. If they cannot directly assist you, they will direct you to one of their partner organisations to ensure you access the best options swiftly and effortlessly.

Reach out to caba today to explore the support they can offer. You don’t have to navigate the road to retirement alone.

About Lisa Baker, Editor 2357 Articles
Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.