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Your Later Life 2019

Picture your future: three new standards for retirement living

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Nigel Peaple

Director Policy & Research, PLSA

Only 23% of savers feel confident that they know how much they need to save for their retirement. [1]


A minimum standard of living for a couple would require around £15,000 per year.

Do you know how much you need to save for your retirement? The PLSA’s Retirement Living Standards are a set of clear measures that identify how much money individuals will need to save in order to achieve one of three standards of living for life after work. Developed in conjunction with the Centre for Research in Social Policy (CRSP) at Loughborough University, the Retirement Living Standards identify how much money an individual or a couple would need to maintain a minimum, moderate and comfortable standard of living in retirement.

That research showed this equates to £10,200 for a minimum, £20,200 for a moderate and £33,000 for a comfortable standard of living. For couples, the figure is 1.5 times the single standard, so a minimum standard of living for a couple would require around £15,000 per year.

For those living in London, there is an additional set of figures that reflect the higher cost of living in the capital.

The figures are for expenditure in retirement, but if you factor in the State Pension at its current rate of £8,767 per year, savers would require additional income from workplace pensions of around £2,000 to reach the minimum standard, £12,000 for moderate and £22,000 for comfortable.

How are the Retirement Living Standards calculated?

The standards use a methodology that is based on a ‘basket of goods’ approach, broken down into six categories: house, food and drink, transport, holidays and leisure, clothing and personal, and helping others.

The research defined a moderate standard around key principles such as a sense of security and knowing you’ll  have enough for your minimum needs, plus some extra to allow you to eat out and have a holiday overseas once a year.

A comfortable standard of living would ensure more financial freedom and the greater flexibility that this provides. The basket of goods approach is very tangible and outcome-focused, which can help people to time-hop and picture their own futures.

How will the Retirement Living Standards be used?

Like the five-a-day healthy eating campaign, the PLSA hopes the Retirement Living Standards will start a national conversation, to promote greater understanding and help people imagine their own spending in retirement.

The website allows savers to look at a range of salaries, ages, savings histories and lifestyle elements, using different personas as examples. This information can help savers understand which of the three standards they might expect in retirement.

What next ?

Personalised engagement through the Standards can help drive action, but we need support from pension schemes and other parts of the industry to achieve that. Savers can expect to see references to the Retirement Living Standards in the tools and calculators that exist to support them.

That might mean you see them incorporated into annual benefit statements or your employer signposting you to them via the company website. Or it could mean you’ll start to see innovative uses of digital tools that use the Standards to nudge you to pay more attention to your pension.

At launch, 22 major providers and pension schemes had already committed to using or supporting the Retirement Living Standards – including Legal & General, M&S and Nationwide. Our target is to reach 90% of active savers by 2025 and in turn help them to picture their future.

Find out more about the Retirement Living Standards

Visit www.retirementlivingstandards.org.uk to explore the basket of goods, see examples and download the full research behind the standards.


[1] According to a recent survey by PLSA’s Retirement Living Standards.

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Chief Executive Officer, Legal and General Retail Retirement

The ageing population is not other people. It’s every one of us, from teenagers to centenarians. It’s the legacy of the twentieth century’s drive to improve the lives (and life expectancies) of everyone. Two generations ago the British people chose to rid themselves of the fear that came with being sick. A Doctor’s visit before the NHS could cost a big chunk of a weekly wage. Now, as we see the first generation of centenarians on the horizon, we need to combat the fear of not knowing how to pay for care or how to get care.


Five million people aged over 80

2020’s challenges are different to those of 70 years ago but our determination to overcome them is not. The ageing society is one of the great achievements of the last hundred years, but there is work to be done to build a long-term care system that by 2036 will service a country where more than five million people will be over 80.

Last year, fewer than half of the people who asked for care support got all that they needed and King’s Fund research shows that only 26% of people are satisfied with social care. 

We need to combat the fear of not knowing how to pay for care or how to get care.

Most care happens when you live at home

Research shows that older people want to stay in their own home for as long as possible, but the care system isn’t helping: the system is difficult to understand; it is hard to match need with what is available locally, and the funding process is confusing. For example, many of us imagine that long-term care is all about finding residential care. In fact, only about three per cent of over 65s live in residential and nursing care, most peoples’ care needs are met while they continue to live at home.

New technology is already helping

New technology, such as the online care comparison and matching site, Care Sourcer, is helping families to understand their options and very quickly find local care services.

As well as Care Sourcer, the Elderly Accommodation Counsel HOOP (Housing Options for Older People) platform helps people figure out whether modifying their existing home might be more efficient and suitable to their needs than moving.

Playing our part

Legal & General began its work in 1836, so we are hard-wired to think about our society and the economy over the long-term. Today’s generational challenge is to support our society as it ages and that means a national effort to create a great system of long-term care – we want to play our part in delivering it.

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