A typical pensioner needs a minimum annual income of £10,830 in order to cover basic living costs, according to financial firm Key Retirement.

The good news is that’s almost £800 lower than last May, when Key Retirement conducted the same research.

That bad news? It’s £2,500 more than you will get from the Government, as the full State Pension adds up to just £8,296.60 a year.

“The basic cost of being a pensioner at around £10,830 a year demonstrates the importance of saving for retirement and generating income on top of state pensions,” says Dean Mirfin, technical director at Key Retirement.

Read more: Pensioners 'could lose homes' in benefit overhaul

Costs vary by location

One (drastic) option, if you are worried about your pension covering your living costs, may be to consider moving to another part of the country.

The research by Key Retirement found that it is £4,700 a year cheaper to be a pensioner in the North East than in London.

East Anglia is surprisingly expensive for pensioners with annual costs of around £11,750, whereas heading to Wales for your retirement would cut your annual costs down to £9,180.

Cost of being a pensioner around the country

Region

Annual cost of being a pensioner

London

£13,400

South East

£12,570

East Anglia

£11,750

South West

£10,860

East Midlands

£10,550

Northern Ireland

£10,320

Scotland

£9,900

Yorkshire & Humberside

£9,780

North West

£9,710

West Midlands

£9,330

Wales

£9,180

North East

£8,700

UK

£10,830

What does your money buy you?

The average retired household spends 14% of their cash on housing and fuel – roughly £1,500 a year.

A similar amount is spent on food and non-alcoholic drinks, around £1,560.

Getting from a to b makes up the next biggest expense with 11% of household cash going on transport, including the cost of running a car.

That makes up around £1,200 a year.

As for fun, the average pensioner spends £1,600 a year on leisure spending, including eating out and heading to the theatre or cinema.

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