How much do I need to retire?

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Kirsty Kerr

March 19, 2024

4 mins read

Understanding how much you’ll need in retirement is important whatever your age. The answer can help you understand if you’re ready to retire, help you make plans or even tell you how much you might need to save. We’ll bring you up to speed with the latest figures so you can get your answer to that all-important question.

First, how do you picture your retirement?

Do you plan to travel or pick up new hobbies? Will you want to redecorate your house or get a new car at any point? Or do you see yourself living a more quiet, modest life after decades of hard work? 

It’s important to ask yourself these types of questions, because knowing what you’ll need to pay for when you stop working can help you decide how much money you’ll need to save. It’ll also help you to plot your needs against the Retirement Living Standards.

What are the Retirement Living Standards?

The Pensions and Lifetime Savings Association has suggested three Retirement Living Standards – minimum, moderate and comfortable – based on research by Loughborough University. Essentially, these standards act as a guideline to show you how much you might need each year depending on the kind of lifestyle you want in retirement.

  • Minimum – Your basic needs are covered, and you have some money left over for non-essentials.
  • Moderate – You have more flexibility and financial security than if you were at the minimum standard.
  • Comfortable – You have more financial freedom and can afford some luxuries.

Each standard includes the cost of ‘baskets’ of goods and services. These are goods and services whose prices are assessed over time, partly to track inflation. The standards show the potential costs of home maintenance, food and drink, transport, holidays and leisure, clothing, and helping others. They let you see how much you might need each year as a single person, as well as a couple.

How much income will you need in retirement?

  Minimum  Moderate  Comfortable
Single person £14,400 a year £31,300 a year £43,100 a year
What standard of living could you have? Covers all your needs, with some left over for fun More financial security and flexibility More financial freedom and some luxuries
House DIY £100 a year to maintain condition of your property. Some help with maintenance and decorating each year. Replace kitchen and bathroom every 10/15 years.
Food  Around £50 a week on groceries, £25 a month on food out of the home, £15 per fortnight on takeaways. Around £55 a week on groceries, £30 a week on food out of the home, £10 a week on takeaways, £100 a month to take others out for a monthly meal. Around £70 a week on food, £40 a week on food out of the home, £20 a week on takeaways, £100 a month to take others out for a monthly meal.
Transport No car, £10 per week on taxis, £100 per year on rail fares. 3-year-old small car, replaced every 7 years, £20 a month on taxis, £100 per year on rail fares. 3-year-old small car, replaced every 5 years, £20 a month on taxis, £200 per year on rail fares.
Holidays and leisure A weeklong UK holiday. Basic TV and broadband plus a streaming service. A fortnight 3* all-inclusive holiday in the Med and a long weekend break in the UK. Basic TV and broadband plus two streaming services. A fortnight 4* holiday in the Med with spending money and 3 long weekend breaks in the UK. Extensive bundled broadband and TV subscription.
Clothing and personal Up to £630 for clothing and footwear each year. Up to £1,500 for clothing and footwear each year. Up to £1,500 for clothing and footwear each year.
Helping others £20 for each birthday and Xmas present. £50 a year charity donation. £30 for each birthday and Xmas present, £200 a year charity donation, £1,000 for supporting family members e.g. paying for grandchildren activities. £50 for each birthday and Xmas present, £25 per month charity donation, £1,000 family support.

Cost and what’s covered for a single person at each level. Figures are available for couples too. The figures shown are the amounts of annual expenditure required to achieve the living standard (i.e. they are not gross income figures). Table source: PLSA.

These figures should not be taken as advice and you need to consider how these apply to your own situation. The figures given only apply to people living outside of London. For more detail, you can head over to the Retirement Living Standards website.

What else should I think about?

Retirement looks different for everyone. How you plan to take your pension money, how long you live and the age you decide to retire will all impact the amount you’ll need. Meaning the Retirement Living Standards should be used as a guideline, rather than a rule.

Also keep in mind that retirement doesn’t have to mean giving up work overnight if you don’t want it to. Semi-retirement might be a good option for you if you don’t feel ready to stop working entirely, or don’t think you can afford to. Since you’ll still get an income from your employer, it’s likely you’d need less money to semi-retire than you would if you were to leave the workforce completely. In this situation, you might decide to take some pension money to top up your earnings while continuing to save into your pension. 

Find out how much your retirement income might be

Once you’ve worked out how much you’ll need, the next step is finding out what you’re on track to have. Our pension calculator can show you what your projected retirement income might be, based on the current value of your pension pots and the amount you’re paying in. It’ll also let you know if there’s a shortfall between what you’re expected to have and what you want to have.

If you do find a shortfall, it’s worth taking another look at your pension payments and thinking about paying in a bit more. If you’ve got a Standard Life plan, you may be able to top up your pension payments online. If you’ve got a workplace plan with us, you may need to ask your employer how to change your payments.

Remember, a pension is an investment. Its value can go down as well as up and could be worth less than what was paid in.

The information here is based on our understanding in March 2024 and shouldn’t be taken as financial advice.

Standard Life accepts no responsibility for information on external websites. These are provided for general information.


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