According to the Pensions and Lifetime Savings Association (PLSA)1, a ‘moderate’ standard of living that includes £55 per week on groceries, a two-week all-inclusive holiday, £10 a week on takeaways and £100 a month to take others out for a meal, could cost a single person £31,300 a year, which is £8,000 more than last year. For couples, £43,100 a year is required to live at this standard.
Minimum, moderate or comfortable
The PLSA’s Retirement Living Standards report details what levels of income retirees will need to live either a ‘minimum,’ ‘moderate,’ or ‘comfortable’ life in retirement. However, the forecast does not factor in any rent or mortgage payments.
As well as the cost of a ‘moderate’ life in retirement rising, so has the cost of having a ‘minimum’ living standard, which shot up by 12% from £12,800 a year, to £14,400 for a single person and £22,400 for a couple.
A ‘comfortable’ standard of living, where there is more financial freedom and some luxuries, could now cost £43,100 per year for one person – a jump from £37,300 a year earlier. This rises to £59,000 for couples to live comfortably.
Inflation and more
The increase in inflation, particularly in energy bills and food prices, over the last few years has contributed to the rising costs of retirement lifestyles. Helping family during the cost-of-living crisis, coupled with people’s expectations of living standards, also played a part.
It’s important not only to focus on your current needs, but to provide for the future and to understand how much you need to save for the standard of living you want in retirement.
1PLSA, 2024
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
