More than half (54 per cent) of low-income pensioners find it difficult to pay bills and credit commitments, leaving hundreds of thousands on a “poverty pension,” according to the Living Wage Foundation.

Research polling low-income pensioners found that rising living costs and reduced income have left 40 per cent of retirees struggling more now than they did while working.

Despite their struggles, many have no financial safety net. While 35 per cent can rely on benefits or support from family, friends or a partner, 30 per cent carry some level of debt and 21 per cent dip into their savings to cover everyday expenses.

As a result of these financial constraints, 14 per cent reported falling behind with bills or rent, turning to payday loans, struggling to heat their homes or regularly skipping meals over the past year.

These financial pressures hit harder for pensioners who rent or live alone, making them even more likely to fall behind on bills or struggle with unexpected costs.

The report found that among renters, 43 per cent carry some level of debt compared to 23 per cent of homeowners while 40 per cent of those living alone are in debt versus 25 per cent of those living with a partner.

Given this hardship, retirement is far from the “golden years” many pensioners hope for. Nearly half (48 per cent) of low-income pensioners have cut back on hobbies and entertainment.

In addition, 43 per cent have reduced spending on gifts or donations and 24 per cent say they can rarely, if ever, afford the non-essentials that make life enjoyable.

It is unsurprising that such financial strain is impacting wellbeing, with 26 per cent reporting increased anxiety due to their income and 25 per cent noting a deterioration in their sleep.

Herbert Smith Freehills Kramer, a Living Pension Employer, UK & EMEA managing partner, employment pensions & incentives, Samantha Brown, said: "The reality is that a significant portion of the population is not on track to fund a secure retirement. Little wonder that trustees and pension funds are increasingly concerned about the long-term implications of this trend.”

She added that addressing the retirement savings gap will require a multi-pronged approach that includes expanding access to workplace savings schemes, enhancing financial literacy and promoting regular long-term contributions.

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