The latest iteration of the Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards puts the cost of a comfortable retirement at £43,900.
The figure for a retired couple is £60,600. Both are well above what most people are on track to achieve.
PLSA puts the cost of a moderate retirement at £31,700, and £43,900 for a couple. The organisation said the bare minimum income required is £13,400 and £21,600 for a couple.
The PLSA said it wants its minimum income benchmarks to become a ‘rule of thumb’ for retirement planning, in the same style as the ‘five a day’ healthy eating maxim.
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Sarah Pennells, consumer finance specialist at Royal London, said: “The retirement living standards are invaluable in helping people to put a price on how much different lifestyles in retirement could cost them.
“We know that many people are not saving enough to have the lifestyle they would like in retirement, but the updated retirement living standards will help pension savers understand how today’s changing living costs could affect different standards of living in retirement.
“Our workplace pension research shows that, while one in five employees with a workplace pension expect to have a minimum standard of living in retirement, over four in 10 are planning on a moderate standard of living with almost four in 10 hoping for a comfortable standard of living.”
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Alexandra Loydon, group advice director at St. James’s Place, said: “Today’s update from the PLSA, highlighting that a single person now needs a minimum of £31,700 per year to secure a moderate standard of living in retirement, should serve as a wakeup call for savers across the country to start thinking seriously about their pension and building up their retirement pot.
“When comparing today’s PLSA figures to our recent financial health research, which found that one in five (23%) UK adults believe they’ll only need a total retirement pot of £50,000 to live moderately well in retirement, it’s worrying that many people are underestimating their retirement needs,” she continued.
“Retirement planning can feel daunting, but savers should use today’s figures from the PLSA as an incentive to consider the lifestyle they want later in life and start putting together a financial plan to help them get there. There are a range of online tools to help with this, and those in more complex scenarios should also consider speaking with a financial adviser if possible.”
