Simon Sarkar
Head of Research at Pensions UK
Retirement planning doesn’t have to start with complicated calculations. Find out where to begin and what to consider.
Thinking about retirement can feel overwhelming. Between busy lives and competing financial priorities, it’s easy to put it off. The Retirement Living Standards (RLS), developed for Pensions UK by Loughborough University, help people picture the retirement they want and what it could cost. Rather than focusing on pension pots and percentages, they bring retirement to life through everyday choices.
Start with your current lifestyle
The RLS set out three different retirement lifestyles that can help you think about your own priorities and circumstances.
The Minimum standard covers all your basic needs, alongside some budget for socialising. It includes a UK holiday, occasional meals out and affordable leisure activities. The estimated cost is £13,900 a year for one person and £22,500 for two people.
The first step is understanding the future you’re aiming for
The Moderate standard provides more financial security and flexibility. It includes running a car, an overseas holiday, regular social activities and greater choice in everyday spending. The estimated cost is £32,700 a year for one person or £45,400 for two people.
The Comfortable standard offers greater freedom and financial confidence. It includes more spending on hobbies, holidays and eating out, allowing for a more spontaneous lifestyle. The estimated cost is £45,400 a year for one person or £62,700 for two people.
Turning retirement plans into action
For most people, the State Pension provides the foundation of their retirement income, with workplace pensions helping to build on it through contributions from both you and your employer. If you’re self-employed, the RLS can still help when deciding how much to save independently.
Not everyone can afford to save more right now, and that’s okay. Today’s financial pressures are very real. However, if your circumstances allow, even a small increase in pension contributions could make a difference to your future.
The first step is understanding the future you’re aiming for. Visit the Retirement Living Standards website to explore the lifestyle that’s right for you. If you’re in a workplace pension, speak to your employer about your options. Your future self will thank you for planning ahead.
