What does someone really need to put their feet up?

04 December 2021

I talk and write a lot about how you can save efficiently, or reduce costs, or challenge your money planning to get the most from it. This is to ensure that life is affordable not only now, but also hopefully in the future.

That's all well and good; however, on average, what income do you need to retire on? This might be aligned to the question of 'how long is a piece of string?' because we are all different, and have different, needs, aspirations and desires, even in retirement.

Noting that we all have our own lifestyles, incomes and expectations from retirement, whatever that looks like, a report from the Pensions and Lifetime Savings Association (PLSA) in October 2021 suggests that a single person will need post-tax annual income of £10,900 net for a minimum standard of living in retirement.

The minimum retirement living standard covers a typical retiree's basic needs plus enough for some social activities, such as a week of holiday in the UK, eating out once a month, but not including running a car.

The PLSA report suggests that this spending budget increases to £16,700 for a couple. For the first time in the assessment, Netflix subscriptions and items such as haircuts are included, and it's an interesting read to compare your lifestyle with what is suggested as an average.

Reading the report further, and its findings across the UK when taking into account day to day housing and living costs, the outline estimates are as follows:

Income Position

Single Person



£10,900 pa

(London £13,200 pa)

£16,700 pa

(London £21,100 pa)


£20,800 pa

(London £24,500 pa)

£30,600 pa

(London £36,200 pa)


£33,600 pa

(London £36,700 pa)

£49,700 pa

(£51,500 pa)

All figures are net, i.e., after tax.

The calculations for retirement living standards are pitched at three different levels - minimum, moderate and comfortable - and are developed and maintained independently by the Centre for Research in Social Policy at Loughborough University.

The PLSA said lockdowns gave workers a foretaste of retirement needs.

"The pandemic has emphasised the importance of economic security as well as social and cultural participation in retirement," said Nigel Peaple, director of policy and advocacy at the PLSA.

The PLSA adds: "We hope the updated standards will encourage people to think about whether they are saving enough for the retirement lifestyle they want and, in particular, whether they are making the most of the employer contributions on offer in their workplace pension."

More on the report and what's been counted in average household spends in retirement can be found here: https://www.retirementlivingstandards.org.uk/

Chapters Financial is not responsible for the content of external websites.

Remember, we are all different and are likely to have accumulated wealth during our lifetimes in different ways. Seeking professional advice a good six months to a year out from your retirement date is very much recommended to ensure that your 'retirement landing' is as planned. Please do talk to the team at Chapters Financial for your individual pension and retirement planning needs.

No individual advice is provided during the course of this blog

Keith Churchouse FPFS
CFP Chartered FCSI
Chartered Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899

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