Retirement Living Standards in the UK: 2024 update published

SnowMan

The Pensions and Lifetime Savings Association (PLSA) have just published an updated report which attempts to identify how much someone might spend at retirement across three different living standards (what they consider to be minimum/moderate/comfortable).  

Thought I'd mention it for anyone who might find it either interesting or useful in retirement planning. It can be accessed at

https://www.retirementlivingstandards.org.uk/details

(scroll down to Read the Latest Research Report)

Below is their calculation of the pension pot size needed to cover each standard of retirement. It is of course important to say that it's dependant on the assumptions they are making. 

Phossy

They have interviewed a few more people this year "In total, 249 people participated in the discussion groups, across thirteen different locations in the UK (including groups in Northern Ireland, Scotland and Wales)", but it feels a woefully small number to get a real feel. Add to that a high proportion are not retired and under 50. I don't think this is a fair representation, but it is nicely packaged and media outlets and YouTubers will run with it without question, but likely a few defense mechanisms.

Cobbler_tone

So between £13,400 - £60,600 depending if you are single, in a couple, live on pasta or enjoy the finer things in life.
These numbers always generate debate, which is about the most use you get from them.

Marcon

Cobbler_tone said:

So between £13,400 - £60,600 depending if you are single, in a couple, live on pasta or enjoy the finer things in life.
These numbers always generate debate, which is about the most use you get from them.

Quite.

The main absurdity is that the numbers assume people are mortgage and rent free at the point of retirement.

GunJack

Marcon said:

Cobbler_tone said:

So between £13,400 - £60,600 depending if you are single, in a couple, live on pasta or enjoy the finer things in life.
These numbers always generate debate, which is about the most use you get from them.

Quite.

The main absurdity is that the numbers assume people are mortgage and rent free at the point of retirement.

Mortgage free I get, but how do you get to be rent free unless on benefits of some sort, which then begs the question how you would afford the moderate or comfortable levels in the first place?!?!?!? Barking...

JoeCrystal

I always enjoy a laugh especially they work out "rent" based on social rent (or how much they spend in shoes every month) rather than market rents last time I read the reports 

JoeCrystal

Cobbler_tone said:

So between £13,400 - £60,600 depending if you are single, in a couple, live on pasta or enjoy the finer things in life.
These numbers always generate debate, which is about the most use you get from them.

£13,400 to £60,600 NET rather than gross which bump up the income required even higher!

Cobbler_tone

The thread at the top 'the NUMBER' has better info.
Most people (with basic intelligence) can work out the ball park of what they need. The ones who don't bother probably muddle through life and either have oodles of money, or just wait for the state pension...and continue to muddle.
I guess they are harmless numbers though, to show the state pension and a very rough pot size for an annuity to achieve different incomes. As there can be no definition of 'minimum', 'moderate' and 'comfortable' in this context, it is wholly subjective.

I look at things very roughly....no NI, no more pension contributions, less tax, less money on fuel/lunches vs more on energy bills, more year 1 spending. Mortgage/rent dependant but would imagine that many people (clearly not those on the bread line) could survive on 50% of what they earn today. If you have plans to really ramp up your holidays, buy fancy cars, increase theatre trips etc, then you have to factor those in, that's common sense.
I did all of that stuff when I really wanted to. I'm ready to wind down the other way now, with enough money to be 'comfortable'...which is around 50% of my wage.  

kimwp

It's a very small number of people that are involved in generating the numbers and also only three categories that an individual could fit into, so it's never going to be accurate for most people.

westv

The "comfortable" income will be easily attainted by most on here. 😂

Marcon

GunJack said:

Marcon said:

Cobbler_tone said:

So between £13,400 - £60,600 depending if you are single, in a couple, live on pasta or enjoy the finer things in life.
These numbers always generate debate, which is about the most use you get from them.

Quite.

The main absurdity is that the numbers assume people are mortgage and rent free at the point of retirement.

Mortgage free I get, but how do you get to be rent free unless on benefits of some sort, which then begs the question how you would afford the moderate or comfortable levels in the first place?!?!?!? Barking...

Here's the relevant extract in full from https://www.retirementlivingstandards.org.uk/details

Housing - the Standards assume people are mortgage and rent free, because this is still what most of the population close to retirement will achieve in the next few years. Moreover, some people on low incomes with low savings are sometimes eligible for Housing Benefit payments to cover the cost of rent. However, although most older households are currently projected to be owner-occupiers over the next 20 years or to be in receipt of Housing Benefit, it's crucial to recognize that an increasing number of individuals will face additional housing costs, ie mortgage payments or rental costs. If you think you will be in this position, it will be necessary for you to add the relevant amount of mortgage or rent to the Retirement Living Standard of most interest to you. To provide you with a general idea of additional housing costs we've included recent rental market statistics. However, it's important to note that housing costs vary significantly based on individual circumstances, preferences, and location. We encourage you to explore costs that align with your unique situation for more accurate planning.