The state pension lasts UK ‘pensioners of tomorrow’ just three full days according to a report by AXA. This is the conclusion of a unique ‘Living on a State Pension’, experiment conducted among adults from across the UK as part of the year long financial social experiment, AXA Avenue.

As the pension debate continues to gather pace, AXA challenged 26 households, including couples and single people, to live off the equivalent disposable basic state pension in an attempt to drive home the message that we will only have the retirement we dream of if we make our own provision.

By the end of the experiment, which ran from Thursday to Wednesday, single women had overspent their budget by an incredible 200%, managing to last only two and a half days, while men overspent by 79% and lasted slightly longer, almost four days on average. The couples taking part in the experiment overspent by 168% and lasted just over three days.

Planning for retirement has been the focus throughout the third quarter of AXA Avenue. The ‘Living on a State Pension’ participants are all aged between 30 and 50 as this group is most likely to be affected by recent changes to pension legislation and the closure of many defined benefit pension schemes.

Some 27.81m adults (74%) expect to have at least one annual holiday either overseas or in the UK in retirement. Weekend breaks and day trips in retirement are looked forward to by 26.84m adults and 26.64m adults plan to regularly dine out on their pension. Over 14m adults have aspirations of owning a place in the sun while 6% of UK adults even plan to have botox or cosmetic surgery in retirement.

So how are we planning on funding this retirement of plenty? The focus of AXA Avenue has been to explore peoples’ attitudes to money and their understanding of managing finances. AXA’s national research has uncovered a worrying trend, with some 17.13m adults, 45% of the adult population, expecting to use credit cards in retirement and the percentage increases as people get older.

Saran Allott Davey, AXA Avenue’s resident independent financial adviser, commented on the findings: “The ‘Living on a State Pension’ experiment has produced startling results. The majority of those that took part have had a real wake up call and are much more aware of the need to plan. More of them are considering professional advice to help them understand the benefits of saving for retirement, and to help them get to grips with the options open to them.

The experiment has highlighted not only the difficulty of living off the basic state pension but the fact that many UK adults are ambivalent when it comes to retirement planning.

Before the experiment 11% of the participants were planning to rely on the state pension in retirement. After the experiment all but one of those participants understood that they had to take personal steps towards planning their income in retirement. The experiment also encouraged participants to think more carefully about their long-term financial stability. After the experiment 62% of the group (compared to only 25% before the experiment) were planning to take immediate action to understand and improve their income and expenditure for their retirement.

Colin Nelson, AXA, commented, “The results from our ‘Living on a State Pension’ experiment highlight some worrying trends. The fact that we struggle to survive on this small amount is not surprising in itself but it is peoples’ attitudes towards funding their retirement that concerns us most. The experiment has acted as a wake up call for those who took part; now we want to communicate that to the rest of the nation.

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