Enjoying a comfortable retirement requires robust financial capital and years of planning and saving, but sometimes that isn't enough. Running out of your pension pot can be challenging, but there are options available depending on your circumstances, age, health, and sources of support.
If your savings are depleted, you may need to rely more heavily on guaranteed income sources such as state pension, pension credit, and housing benefit, among other schemes.
What happens if I run out of money in retirement?
If you have run out of money in retirement, it means you have exhausted your personal savings, investments, and home equity. You are then forced to rely entirely on guaranteed safety nets like the State Pension, dramatically downsize your living standards, or seek financial support from family.
However, several sources of support may be available depending on your age, income, savings, health, and living situation.
State Pension
The first source of support for many retirees is the Department for Work and Pensions' (DWP) State Pension. Eligibility depends on National Insurance contributions and qualifying years. This provides a regular income for those who have reached State Pension age. You can check your State Pension forecast and National Insurance record through GOV.UK.
Pension Credit
Pension Credit is a means-tested benefit designed to top up the income of pensioners on low incomes. It can also unlock access to additional support, such as help with housing costs, council tax, and heating bills. Many people assume they do not qualify because they own a home or have some savings, but they may still be eligible. More information is available at GOV.UK.
Housing Benefit and Housing Support
Retirees who rent their homes may be able to receive help with housing costs through Housing Benefit (for those of State Pension age) or other local support schemes administered by their council. The amount awarded depends on your income, savings, household composition, rent level, and whether you have a partner living with you. If you own your home, you generally cannot claim Housing Benefit, although other forms of support are available.
Council Tax Reduction
Many local authorities offer Council Tax Reduction schemes for pensioners with low incomes. The amount of help varies by local authority and individual circumstances. Eligibility is based on income, savings, household circumstances, and disability status. Some pensioners receive substantial reductions, while those with very low incomes may pay little or no council tax.
Attendance Allowance
Attendance Allowance provides financial support to people over State Pension age who need help with personal care because of a disability or health condition. It is not means-tested. The benefit can help with personal care, mobility-related needs, additional household support, and paying for care services. Importantly, it is not means-tested, so your income and savings do not affect eligibility. Details can be found at GOV.UK.
Help With Health Costs
Depending on income and circumstances, retirees may qualify for assistance with NHS dental treatment, eye tests, prescription costs (where applicable), glasses and contact lenses, and travel costs for hospital appointments. Those receiving Pension Credit often qualify automatically for several forms of NHS assistance.
Winter Fuel Payment and Energy Support
Eligible pensioners may receive a Winter Fuel Payment to help with heating costs. Additional support may also be available through local authorities, energy suppliers, and government-backed schemes during periods of high energy prices. The payment is usually made automatically to eligible recipients and can help offset rising energy costs during colder months. Information is available through GOV.UK.
Charitable Grants
Organisations such as Age UK and Independent Age can provide advice and may help people identify charitable grants and support funds that match their circumstances. Some grants are available to anyone meeting specific criteria, while others are linked to former occupations, military service, disabilities, or particular health conditions. Examples include support for emergency household expenses, mobility equipment, home repairs, utility bills, and essential furniture.
Local Authority Adult Social Care
If a retiree requires care and support, their local council can assess their needs and determine whether financial assistance or social care services are available. Depending on the outcome, you may receive home care visits, adaptations to your property, day centre services, residential care support, or equipment such as handrails or mobility aids. A separate financial assessment determines how much, if anything, you must contribute toward the cost of care.
Family Support and Downsizing
Some retirees choose to increase available funds by downsizing their home, taking in a lodger, moving closer to family, or receiving financial assistance from relatives. Downsizing involves selling a larger property and moving to a smaller or less expensive home, releasing capital to fund retirement. Equity release allows borrowing against the value of your home while continuing to live there, receiving a lump sum or regular payments, with repayment usually occurring when the property is sold after death or long-term care.
Free Advice Services
For guidance on benefits and financial support, retirees can contact Citizens Advice, Age UK, or MoneyHelper. These organisations can help identify benefits that are often overlooked and assist with applications.
