According to the Pensions and Lifetime Savings Association (PLSA)9, 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.
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, due to retirement living costs. However, the forecast does not factor in any rent or mortgage payments into these retirement living costs.
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.
The increase in inflation, particularly in energy bills and food prices over the last few years has contributed to the rising retirement living costs. 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 your retirement living costs will be in order to save for the standard of living you want in retirement.
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Paul has over 20 years of experience in financial planning and services, meeting clients across East Sussex and Kent including Bexhill, Hastings, Brighton, Tunbridge Wells, Lewes, Battle, Crowborough, Uckfield and further afield.
9PLSA, 2024
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