Lowest income retired households receiving least State support

Retired households with the lowest incomes are receiving the least support from the State, raising concerns that many cash-strapped pensioners may not be checking their entitlement to benefits because they own their home, new research from HUB Financial Solutions has revealed.

The advisory firm announced that the lowest income group of retired households has a home ownership rate of 88% – higher than all but the richest quintile, at 90%.

ONS figures have revealed the lowest income group, or the bottom quintile, receive on average £936 a year in State benefits, excluding State Pension, which is 8% of their total income.

HUB Financial Solutions highlighted this is far less than the £2,642 benefits received by those with the next lowest incomes – equivalent to 15% of their total income.

Managing director at HUB Financial Solutions, Simon Gray, commented: “The common assumption that those with the lowest incomes get the most support is reversed in retirement. These figures prove that retired households with the lowest incomes receive the least State help.

“What stands out is the high home ownership rate of 88% among households with the lowest incomes. That is almost as high as the 90% ownership rate of those with the highest incomes, and far higher than all the middle-income groups.”

HUB Financial Solutions found that middle-income retired households receive the most State benefit at £2,715 a year, which is 12% of their income, and even those in the group with the highest incomes are receiving more in cash from the State – £1,261 a year – than those in the lowest income group.

“Retirement planning is not just about making good choices with pensions,” Gray added. “But also understanding the wider context of retirement and what other support is available. Homeowners appear less likely to claim their eligible benefits, so could benefit from a reminder at this key time of their lives.”

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