The cost of a comfortable retirement

11 September 2023

At a glance

Whether you’ve got 20 years before you retire or just a few, it’s important to have an idea of just how much money you’ll need for a comfortable standard of living once you’ve finished working.

How much money do I need to retire?

Helpfully, the Pension and Lifetime Savings Association shows approximately how much individuals and couples will need to have a comfortable, moderate or minimum standard of living in retirement.

Their latest figures show that a single person will need £12,800 a year to achieve the minimum living standard, £23,300 a year for moderate, and £37,300 a year for comfortable. For couples it is £19,900, 34,000 and £54,5001.

The minimum living standard covers most people’s basic needs plus enough for some fun. For example, you could holiday in the UK, eat out about once a month and do some affordable leisure activities about twice a week.

The moderate lifestyle provides, in addition to the minimum lifestyle, more financial security and more flexibility. For example, you could have a two-week holiday in Europe and eat out a few times a month.

At the comfortable level, you could enjoy some luxuries like regular beauty treatments, theatre trips and three weeks in Europe a year.

By giving savers a general figure they can understand, the hope is that savers can then start to develop their own personal targets based on their individual circumstances and aspirations.

Whatever stage you’re at on your saving journey, having a specific income in mind can help you focus.

Reality check

Assuming you qualify for the full State Pension of £10,600 2023/24 a year, the PLSA says you’ll still need to build up a pot worth at least £590,000 to achieve a comfortable retirement1. This is if you want to turn your pension into an annuity, which pays you a guaranteed annual income for life in retirement.

Many retirees may be shocked to learn how little income their savings will provide. “There’s still a long way to go in terms of raising awareness,” says Tony Clark, Senior Propositions Manager at St. James’s Place. “It’s vital to realise that building a decent retirement pot means being engaged with the process early on.”;

“The good news is that through a combination of the full State Pension and auto-enrolment in a workplace pension, the minimum level should be achievable for most people.”

“But current minimum contribution levels are not enough to get average savers over the line from a minimum to a moderate lifestyle standard. That’s why it’s vital that they are provided with the education, tools and advice to make better and more proactive investment decisions during their working lives”, adds Tony.

Read more about how much money you need to save for retirement.

Get in touch

Whatever stage you’re at on your saving journey, having a specific income in mind can help you focus.

A financial adviser can give you an idea of what your retirement income will be, based on how much you’re saving. Get in touch today so we can help you enjoy the retirement you deserve.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

Auto-Enrolment products are not regulated by the Financial Conduct Authority.

1Retirement Living Standards, Pensions and Lifetime Savings Association, 2023

SJP Approved 07/09/2023

Request a call back

It takes two ticks to complete the contact section below and we will call you back at the earliest opportunity.

    Select a time for a call
  • Illingworth Seddon together with St. James’s Place Wealth Management plc are the data controllers of any personal data you provide to us. For further information on our uses of your personal data, please see our Privacy Policy or the St. James’s Privacy Policy.

Background image