Expert ‘£2,100’ alert for key UK group | Personal Finance | Finance
Brits hoping for a comfortable retirement now need even deeper pockets, new figures show.
Research highlighted by Which? Money found a ‘comfortable’ retirement for a couple now costs £62,700 a year – £2,100 up from £60,600 last year – as rising food, household and transport bills continue to pile pressure on pension savings. For a single pensioner, a comfortable retirement now costs £45,400 a year, while even a basic ‘minimum’ standard of living has climbed to £13,900. The figures, based on the latest retirement living standards from Pensions UK, underline growing fears that millions are not putting enough aside for later life.
Which? Money expert Holly Lanyon said the rising costs showed how important it was for savers to understand how much retirement may actually cost.
She pointed to new evidence showing just 9% of workers are currently on track to achieve a comfortable retirement income.
Under the latest estimates, a moderate retirement lifestyle now costs:
- £32,700 a year for a single person
- £45,400 for a couple
Meanwhile, the minimum standard has risen to:
- £13,900 for one person
- £22,500 for a couple
And the comfortable standard now stands at:
- £45,400 for one person
- £62,700 for a couple
The retirement living standards are compiled by researchers at Loughborough University on behalf of Pensions UK and are designed to show what retirees need for different lifestyles. They include spending on essentials such as food, utility bills and transport, alongside leisure activities and holidays.
The warning comes amid mounting concern over retirement under-saving in Britain. According to Pensions UK, around 82% of workers are expected to reach only the minimum retirement standard, while fewer than one in four are likely to achieve a moderate retirement.
Recent warnings from the Pension Commission suggested as many as 15 million people may not be saving enough for retirement.
Professor Matt Padley, co-director of the Centre for Research in Social Policy at Loughborough University, said: “We know that many people are not saving enough for retirement, but we also know that for some people it is simply impossible to save any more – you can’t save money you don’t have.”
Experts also warned younger savers may need far more than today’s headline figures because inflation will continue pushing up retirement costs in future decades.
Gary Smith, retirement specialist at Evelyn Partners, said someone needing £45,400 for a comfortable retirement today could require almost £75,000 a year in 20 years’ time if inflation averages 2.5 per cent. The research also highlighted the extra pressure facing people living alone.
While a couple receiving the full state pension can broadly meet the minimum retirement standard, a single pensioner still faces a shortfall because many household bills such as energy, broadband and insurance cost almost the same whether one or two people live in a property.
The full new state pension in 2026-27 is worth around £12,548 a year, leaving someone living alone roughly £1,350 short of the minimum retirement standard before other savings are taken into account.
Which? Money also highlighted estimates showing savers may need pension pots of more than £330,000 to fund a moderate retirement lifestyle alongside the state pension.
The consumer group urged workers to check their state pension forecast, make full use of pension tax relief and consider increasing workplace pension contributions where possible. More details can be found here.
