How much money will you need to retire? What independent information is there?
The Pensions andLifetime Savings Association (PLSA) can help.
Itʼs developed a set of Retirement Living Standards: ʻMinimumʼ, ʻModerateʼ andʻComfortableʼ.
The PLSA Standards aim to help you picture your future, so that you can understand how much youʼll need each year to pay for the lifestyle you want.
A ʻMinimumʼ standard covers your basic needs; a ʻModerateʼ standard can give you more financial security and flexibility; and a ʻComfortableʼ standard can provide more financial freedom and some luxuries.
Each standard is based around a basket of goods and services.In 2019, the estimate was at least £10,000 per year to cover basic expenses in retirement (or about £15,000 for a couple) living outside London. You can find more information in our two minute video below.
Transcript for video PLSA
You have a workplace pension with us, but do you know how much you should be saving into it to give you the type of retirement you want?
How do you know how much money you will need when you stop work, and what type of lifestyle that will allow you to have?
To help people picture their future retirement and what that might cost, Loughborough University and the Pensions and Lifetime Savings Association who represent UK pension schemes, have put together the PLSA/Loughborough University Retirement Living Standards so that you can see how much retirement income you will need.
The standards are pitched at three lifestyle levels - minimum, moderate and comfortable and show how much you would need a year to pay for those different lifestyles in retirement.
All the figures are for 2021 and would include any workplace pensions, private pensions, state pension and savings.The figures on the left in each picture are for a single person and the figures on the right are for a couple. These are net figures, after any income tax.
The standards can be more easily remembered as £11,000-£21,000-£34,000 a year for individuals and £17,000-£31,000-£50,000 a year for couples and have been based on a basket of goods and services, from food and drink to holidays.
The minimum level covers your basic needs and costs, including your bills. There is also money to spend on leisure activities such as a one-week holiday every year, but at this level you’d have to budget very carefully.
The next level sets the bar higher. With your basics covered, there would be more money to spend on food and clothes and the things you enjoy such as leisure activities.
Moving up the scale, here’s where your budget can really stretch and provide more. You would have more financial freedom to spend on luxuries, such as 3 weeks foreign holiday in Europe every year and replacing your car more often.
Everyone is different, but the attitude you have to saving really matters. The good news is that there are things you can do that could make a difference.
If you want to learn more go to the website shown on the screen. This will also provide information on the assumptions used and you can log in to your online account now to see if you are saving enough for retirement.
What can you do next?
Log in to MyWorkplace
Manage your pension the easy way by logging into your account on our online platform - MyWorkplace. Giving you secure online access to your pension wherever and whenever you need it.
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MoneyHelper
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