How to close the retirement pension gap for a single person

While there are many advantages to being single, it may also leave you short on funds for retirement

However, there are still steps you can take to fill the void before you quit working as a single person.

The disadvantage of being single extends beyond the absence of Valentine's Day cards, chocolates, and flowers; it also affects your pension.

Standard Life research indicates that in order to maintain even a moderate standard of living in retirement, single retirees require nearly £230,000 more in their pension fund than couples.

A moderate retirement living standard requires an annual income of 31,700 for retirees, according to Pensions UK.

A couple would require 43,900 annually in contrast.

With two state pensions and retirement pots, this is simpler to accomplish.

Although your pension is not the only important consideration when choosing a partner, the numbers demonstrate the financial benefits of getting married and being able to divide expenses.

"The advantages of being in a relationship go far beyond getting a rose on Valentine's Day," stated Mike Ambery, director of retirement savings at Standard Life.

"The financial reality is that retirement expenses differ significantly for individuals living alone, regardless of whether they are single voluntarily or due to circumstances. Because living alone rarely results in a halving of housing, household bills, and daily expenses, single retirees usually need to save much more to maintain the same standard of living.

Additionally, it's critical to keep in mind that things don't always go as planned in life. Nowadays, it's important for couples to make sure they're ready for retirement, even in situations where they might be handling their money alone.

The one pension premium.

The financial gap between single and married retirees has been brought to light by Standard Life using Pensions UK's Retirement Living Standards.

Single retirees need an after-tax income of 31,700 per year to maintain a moderate standard of living, which includes a car and one two-week overseas vacation annually, according to Pensions UK.

A yearly income shortfall of £24,509,50 before taxes results from assuming a full new state pension of £11,973 annually.

According to Standard Life, a retiree would need to have accumulated about £455,250 in retirement savings at current rates in order to secure this income through an inflation-linked annuity.

Pensioner couples, on the other hand, require a combined annual after-tax income of 43,900 in order to maintain a moderate standard of living. Assuming two full state pensions, this could be accomplished with a joint pension pot of 456,500 at current rates, which would fund two annuities with respective costs of £228,500, or nearly half of what a single pensioner would need.

The disparity is noticeable even at the bare minimum of living, which includes a week-long vacation in the UK annually and basic necessities but excludes a car.

To reach this level, single retirees must have an after-tax income of 13,400, along with savings of about 31,750 after deducting the full state pension and an annuity that pays 1,634.50 annually. However, in order to meet the same minimum standard, couples would require 21,600 annually, which would be covered by two complete new state pensions.

The gap gets wider at the comfortable level, which includes a more opulent vacation abroad, frequent home improvements, and an annual clothing budget of £1,500.

In order for a single retiree to attain the same standard of living, they would need to accumulate approximately 736,500, while a couple would need to accumulate 846,000, or 423,000 total.

How to close the gaps in your pension.

There is power in numbers when it comes to retirement planning. You and your spouse can pool your savings and split the expenses if you are married.

There are tax advantages to marriage in addition to the romance and camaraderie.

You don't necessarily need a partner to fill in the gaps in your pension, though. One person is still capable of managing their own finances.

Increasing your pension contributions is one way to help grow your retirement portfolio by investing more money in the stock market.

Small pension funds are often perceived as a problem that many people resolve by taking the money out as soon as possible, according to Stephen Lowe, group communications director at retirement specialist Just Group.

For a lot of people, those meager pension funds will mean the difference between not having enough money to meet the minimum retirement living standard and being able to go above and beyond and indulge in more treats.

Longer work hours are an additional choice. This gives you the option to postpone your state pension and indicates that you have contributed for more years.

"Deferring their state pension can increase the amount they receive when they eventually claim it," stated Daniel Wiltshire, independent financial adviser at Wiltshire Wealth.

"It rises by 1% for every nine weeks that they postpone receiving their pension, which comes to about 5.8% annually. In later life, this boost can help fill a gap in income, which could be advantageous for people without other retirement plans.

Completing any gaps in your national insurance (NI) record may also help you increase your state pension entitlement.

Normally, NI contributions can only be made up for the previous six years, but the government has granted a special concession that allows people to claim back to April 2006 through April 2018.

In April 2025, this came to an end.

The head of macroeconomics at Sad Rabbit Investments, Gabriel McKeown, stated: "Every year that is missed in the great pension race is a barrier, and many are racing to close NI gaps in order to reach the finish line of financial stability because the cost of living crisis is still prevalent.

Additionally, from a financial perspective, increasing contributions makes sense because, with longevity and inflation risks increasing, maximizing a stable, inflation-protected state pension can be a wise hedge against unforeseen financial difficulties in the future.

"But for those who are prepared to look outside of the state pension, private investments in a diversified portfolio can help people create a strategy that adjusts to market conditions and might even beat the fixed returns offered by government pensions, providing a more flexible approach catered to time horizons, financial objectives, and risk tolerance.