Interesting report about retirement lifestyle (Quilter Retirement Lifestyle Report 2025)

JoeCrystal

I just came across the report about the attitudes and health of retired people. It is interesting to see that spending is far more realistic compared to the Retirement Living Standards: from PLSA or as they call themselves now, Pensions UK.

It suggests that the average retiree spends £22,141 annually, with holidays, shopping and housing as the most significant expenses. Full breakdown can be found on page 15. Critically, and I agree, the state pension is heavily reliant upon. The report pretty much divided them into six sections based on income and age.

I personally thought it was an interesting read. So I wonder which retirement personas you belong to! 

I attached the link to the full report itself: https://www.quilter.com/4a327f/siteassets/about-us/quilter-retirement-lifestyle-report.pdf

Here is the webpage for anyone who doesn't want to read through the whole report:

https://www.quilter.com/products-and-services/retirement/quilter-retirement-lifestyle-report-2025/?Role=cust

EDIT: I am shocked, shocked to find out that many are not happy about the IHT changes: I quoted:

"One underappreciated aspect of the change to inheritance tax is the extent to which it has rendered previous financial plans redundant. Our research found that a little over a third (35%) of retirees chose to transfer out their defined benefit pension into a defined contribution pot in retirement. Of this group, 40% did so because they wanted to pass it on to family in a tax-efficient way. Many of these people will now find they have to radically alter their plans to ensure their families are not in line for large tax bills when they die."

Phossy

It's an interesting report. It has a much broader sample size (about a factor of 40 !) over the PLSA, so that's a better basis straight away. It also feels more grounded in reality from a spending point of view, however, those spending numbers don't seem to correlate particularly well with the incomes quoted later in the report, which support much higher spending if I am reading it correctly. I take some comfort in seeing  the spending breakdowns presented in this report; they are definitely more aligned to what seems a fair and reasonable spread to me. It seems more focussed on understanding and reporting than putting the fear of god up people.

ali_bear

JoeCrystal said:

....

It suggests that the average retiree spends £22,141 annually, with holidays, shopping and housing as the most significant expenses. 
....

I have not yet read the report. I only want to comment on the meaning of the word average. Is this the (arithmetic) mean? If so then it would indicate that the majority spend less than this. Since there are a small number who clearly spend a great deal more. 

Perhaps the report makes this more clear?

QrizB

ali_bear said:

JoeCrystal said:

....

It suggests that the average retiree spends £22,141 annually, with holidays, shopping and housing as the most significant expenses. 
....

I have not yet read the report. I only want to comment on the meaning of the word average. Is this the (arithmetic) mean? If so then it would indicate that the majority spend less than this. Since there are a small number who clearly spend a great deal more. 

Perhaps the report makes this more clear?

The Executive Summary of the full report quotes it as the mean spending.

Although it confusingly then says:

Across the whole sample the median gross household income is £35,000, close to average earnings for a working adult. The mean, skewed by high earners, reaches £52,780.

Which would suggest that income is considerably higher than spending?

Edit to add: perhaps spending is per person, while the other figures are (as stated) per household.

p00hsticks

QrizB said:

ali_bear said:

JoeCrystal said:

....

It suggests that the average retiree spends £22,141 annually, with holidays, shopping and housing as the most significant expenses. 
....

I have not yet read the report. I only want to comment on the meaning of the word average. Is this the (arithmetic) mean? If so then it would indicate that the majority spend less than this. Since there are a small number who clearly spend a great deal more. 

Perhaps the report makes this more clear?

The Executive Summary of the full report quotes it as the mean spending.

Although it confusingly then says:

Across the whole sample the median gross household income is £35,000, close to average earnings for a working adult. The mean, skewed by high earners, reaches £52,780.

Which would suggest that income is considerably higher than spending?

Edit to add: perhaps spending is per person, while the other figures are (as stated) per household.

I was about to say the same as your edit which onyl appeared as I quoted it - spending is quoted per individual retiree, while income given is per household....

Albermarle

Thanks for the links. I have not looked in detail at the figures but a couple of things seemed to stand out.

They report spending on an individual basis, seemingly taking no account of the difference between single households and those who live with a partner. ( unless I missed it) .
The PLSA figures show both, and make it clear that if a single person needs £X pa to live a Moderate lifestyle ( for example) then a couple do not need £X times 2 but maybe only times 1.6/1.7.
I think that is an important distinction.

The other point is that there are lots of references to taking financial advice. As the report is written by a company of financial advisors/wealth managers, then that inevitably colours my view of some of the info.

JoeCrystal

To be fair, it did say that across the sample, the gross sample, the median gross household income is £35k. But the mean is, skewed by high earners, which is £52.780. However, I would point out that it is based on households since the surveys mentioned some incomes included from their other partners or are single.

It did not clarify if it is median or mean, but from the look of it, it may be mean. 




They did put spending patterns across their "personas". It is I think, and they should have made it clearer that majority of them are married or in a relationship so most households surveyed would be two-person households.

Shimrod

QrizB said:

ali_bear said:

JoeCrystal said:

....

It suggests that the average retiree spends £22,141 annually, with holidays, shopping and housing as the most significant expenses. 
....

I have not yet read the report. I only want to comment on the meaning of the word average. Is this the (arithmetic) mean? If so then it would indicate that the majority spend less than this. Since there are a small number who clearly spend a great deal more. 

Perhaps the report makes this more clear?

The Executive Summary of the full report quotes it as the mean spending.

Although it confusingly then says:

Across the whole sample the median gross household income is £35,000, close to average earnings for a working adult. The mean, skewed by high earners, reaches £52,780.

Which would suggest that income is considerably higher than spending?

Edit to add: perhaps spending is per person, while the other figures are (as stated) per household.

The spending figures all appear to be individual figures, so double those up for households.

I've only skim read the report, but it seems to have a heavy focus on inheritance tax changes. Presumably quilter are offering a product or service to address some of these concerns 

I am surprised that household ncome (presumably pre tax, though I could not see that definition in the report) can be £60k but still be counted as a scrimper. Even on this board, I think most would consider that a good retirement.

I do wonder if some of the worries people have are related to taking too high a withdrawal rate. Or not really knowing what a safe withdrawal rate is.

JoeCrystal

Albermarle said:

Thanks for the links. I have not looked in detail at the figures but a couple of things seemed to stand out.

They report spending on an individual basis, seemingly taking no account of the difference between single households and those who live with a partner. ( unless I missed it) .
The PLSA figures show both, and make it clear that if a single person needs £X pa to live a Moderate lifestyle ( for example) then a couple do not need £X times 2 but maybe only times 1.6/1.7.
I think that is an important distinction.

The other point is that there are lots of references to taking financial advice. As the report is written by a company of financial advisors/wealth managers, then that inevitably colours my view of some of the info.

Indeed, that also the first thing come to mind. I would agreed that having spending per retiree and income per household is very confusing and unneeded. After further reading, it seem that it is heavily surveryed towards more wealther spending. I am going have to say that maybe the household spending is not realistic anymore!

I might actually ask the Press Office about that.

kimwp

Always interesting, thank you for posting OP.

I like that they've broken the numbers into different age gaps, it would good if they'd split the figures for couples and singles as the plsa did as that significantly affects housing costs. Also, smaller income brackets at the lower end, where smaller increases of income have greater effects on spend freedoms, rather than a broad brush under or over £35k. For example- state pension only, 17k, 22k (reportedly the income of the happiest retirees), 27k, 35k

Phossy

Yes, the more I read it the more confused I get. Initially I thought it was households, but it is stated as per retiree on the spending side. Note the comments "The Index reveals that the average retiree in the UK spends approximately £22,000 a year. This sits below the £31,700 expenditure level suggested by Pensions UK, formerly the Pensions and Lifetime Savings Association (PLSA), to achieve a moderate lifestyle for a single person, but higher than its minimum estimate of £13,400." It does say at some point it is 'unweighted', which might explain some of the high spend numbers on electricity, TV and phone when you double them for a household. I think I will stick with my own estimates, at least I understand those fully.