The basic annual cost of being retired is £11,830 a year or nearly £230 a week, according to Key.

The equity release adviser found that the weekly bill of £227.50 per person to fund the basics is 35% more than the full basic State Pension of £168.60.

This huge gap highlights the need for other sources of income in retirement.

Regional split

There is also a wide variation in retirement costs across the country. The cost of retirement in the South East of England is nearly £4,000 a year more at £14,270 than in the West Midlands where the cost is £10,280.

Retired people in the South East, South West, London, East Anglia and the East Midlands all need to find more than the national average while the less expensive areas of the country include Wales, Northern Ireland and the North East of England.

What does the money cover?

The two biggest weekly costs are utility bills – gas, electricity and water – and food with both accounting for 20% of spending. Both cost around £2,370 a year on average.

Transport, including the cost of running a car, accounts for 16% of bills while spending on entertainment costs around 23%.

Boost your retirement funds

The basic costs in retirement underlines the need to maximise income from all sources available including property, said Key.

It revealed that retired homeowners using equity release plans take an average £76,500 in property wealth from their homes which is enough to fund six-and-a-half years of the basics without spending on anything else. The property wealth released would be enough to cover the shortfall between the State Pension and basic spending for nearly 25 years.

Will Hale, CEO at Key said: “With retirees needing 35% more than the full state pension provides, people need to think carefully about how they will bridge this gap. Workplace and private pensions as well as savings and investments can help but for most people maintaining a decent standard of living in retirement means maximising all sources of income. Property is increasingly a major part of retirement planning with retired households literally sitting on more than £1 trillion of wealth.”