The Motley Fool

State Pension leaves 1 in 20 in ‘severe poverty.’ Could the FTSE 100 protect you in retirement?

Image source: Getty Images.

The State Pension. It’s a topic that’s chills us to the bone here at The Motley Fool.

Clocking in at just £168.60 per week, the basic pensioner benefit in the UK is amongst one of the worst in Western Europe. It’s scant reward for a lifetime of hard work and threatens to leave millions of us living on the breadline.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

You don’t need to just take our word for it, mind. A recent study titled ‘Pension Reforms and Old Age Inequalities in Europe’ found that the paltry State Pension has seen poverty rates amongst British pensioners explode during the past 30 years.

‘Severe poverty’ warning

According to the report, authored by Professor Bernhard Ebbinghaus of the University of Oxford, a shocking one in 20 (5%) of Britons over the age of 65 are now living in severe poverty.

This is up from less than one in every 100 (or 0.9%) back in the mid-1980s.

Speaking to the Observer this week, Ebbinghaus talked of the “rather ungenerous basic pensions with means-tested supplements” which have multiplied the numbers of elderly people living in severe poverty today. The term severe poverty is defined as having an income of 40% or less of the median average.

Ebbinghaus goes on to explain that the basic State Pension amounts to just 16% of average earnings in the UK and requires a long period of contributions. He added that “income-tested or means-tested targeted benefits are needed to supplement basic pensions and to lift them out of severe poverty,” add-ons which just one in six British pensioners currently receive.

Opportunity knocks

It’s clear, then, that just sitting back and hoping that the State Pension will support you in your later years is a recipe for disaster. Pensioners are having a tough enough time as it is and things threaten to get worse for later generations too — a recent report from a leading think tank, one that suggests the pension age should be hiked to 75, is fresh evidence of this.

There’s no good reason why you should find yourself struggling to make ends meet, though. An abundance of brilliant investment share-buying opportunities exist right now, which we can all use to build a bacon-saving nest egg through popular products like a personal pension, a Stocks and Shares ISA or a SIPP. Just ask one of the many ISA millionaires who are now living the life of Riley in retirement about how share investing can change your life.

One way to build your wealth pot through the years is through buying into a FTSE 100 tracker fund. These vehicles can’t completely protect you against temporary volatility in share markets but, over the long term, they’ve been proven to generate some stunning returns. And unlike buying individual shares, a tracker helps  you to spread the risk by getting exposure to a broad range of companies and can help you reduce the costs associated with stock investing too.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.