Picture your future: what will it look like?

Jamie Jenkins

What sort of retirement would you like to enjoy and do you know how much it could cost? New Retirement Living Standards should make things clearer so that you can save for what you have in mind.

Can you imagine yourself retired? It’s hard, unless you’re at that point already, or getting close.

It’s even harder for younger people. I remember a study[i] a few years ago where we asked some young people to think about what it would be like to be retired, and scanned their brain activity to see how they responded.

The results were fascinating. It turns out that thinking of your much older self causes a similar reaction to that of thinking of someone who is a complete stranger.

But, as distant as it might seem, it’s not a stranger’s future – it’s yours and mine. And to get a decent retirement when it arrives, we have to plan and save for it now.

The question is: how much will you need when you get there? Well that depends on what you have in mind.

Think about what you might want to enjoy and do in retirement

Do your plans involve holidays abroad once or twice a year, home renovations, a new car and supporting your family? Or would you be comfortable with a mini-break ‘staycation’ and having no car? Or somewhere in between.

How much do things cost during the average retirement?

The Pensions and Lifetime Savings Association (PLSA) has developed new Retirement Living Standards to help us understand how much everyday living and some luxuries cost, so that we have a goal to aim for when it comes to saving for the kind of life we want.

“The power of the Retirement Living Standards,” says the PLSA, “lies in giving people a real sense of what they will be doing and how they could be spending their money when they finish work.”

“Talking to people about the building blocks of their lives such as their car, their home comforts, how much they can give their family, the kind of holidays they’ll have – helps them to engage with their pension.”

What the Retirement Living Standards say you’ll need


retirement living standards

Figures are for living outside London. For London costs, go online at Totals are net of tax – find out more here.

  • To get by: To enjoy a basic lifestyle with only a little left over for non-essentials such as a mini-break in the UK you’ll likely need at least £10,200 each year as a minimum income to live on; or £15,700 for a couple
  • Enjoy more:
    A more secure and moderate standard of living, with enough left over for owning a car, better birthday presents and a European two-week holiday is estimated to cost at least £20,200 a year; or £29,100 for a couple
  • Aiming for a life with greater financial freedom:
    Freedom to enjoy some luxuries such as three-weeks’ holiday in Europe, replacing your car every few years and some major home renovations cost around £33,000 a year; a couple would need an estimated minimum joint income of £47,500 each year to be comfortable. (PLSA)

How much will you need to have in your pension pot to secure the level of income you’re aiming for?

It’s really helpful to know what to aim for, so what’s the next step?

Fortunately, more of us are saving in a workplace pension than ever before and with more information and choices available we can all take responsibility for helping grow our own retirement savings pots.

  • If you have a workplace or personal pension, go online to check what you’ve got and find out how your pension savings are doing, check your annual statement and get to know what’s so good about a pension.
  • Use our simple pension calculator to see if you’re saving enough to help achieve the Retirement Standards you want.
  • Consider increasing your pension saving to help you get where you want to be.
  • Consider saving into other tax-efficient products such as an ISA.
  • Think about taking professional advice to help you plan – there’s normally a cost for this.

Where else could your income come from?

While your own pension is an obvious choice for funding your retirement plans, don’t forget about any other investments you may have, or any inheritances you may receive and the value of any property you own.

Then there’s the State Pension but it’s currently less than £9,000 a year and you’re not eligible until you’re at least 66 possibly later. Check what you’re in line for and when, here.

The PLSA income targets are something which can really bring retirement to life and give you something to aim for but there’s no substitute for individual planning. You may want to consider getting professional advice to help you create a full financial picture. Financial advisers can help you plan ahead, avoid paying unnecessary tax and help you find ways to make your money last.

If you don’t have an adviser you can find one local to you at, visit our website for more information about financial advice, or contact 1825, Financial Planning from Standard Life*.

Find out more at Retirement Living Standards.


*1825 is a trading name for the Standard Life Aberdeen group’s advice business

Pensions are investments and their value can go down as well as up and may be worth less than what was paid in. This article shouldn’t be taken as financial advice and is based on our understanding in November 2019.

[i] Saving in Mind research paper by Standard Life. 2013