Part of what we do is preparing people for their retirement. To help people better understand how much they might need, we often refer to the PLSA Retirement Living Standards data. This is developed and maintained independently by the Centre for Research in Social Policy at Loughborough University. The PLSA has today announced an update to their figures and you may have seen/heard reference to this on news sites and on television/radio bulletins.
The headlines focus on estimates that a single person needs to spend £14,400 a year for a ‘minimum’ standard of living in retirement, and £43,100 a year for a ‘comfortable’ retirement. Couples require a combined £22,400 at the ‘minimum’ level, and £59,000 at a ‘comfortable’ level. These figures represent significant increases from what has gone before, reflecting recent increases in the cost of living and the spending habits of retired people.
Insurance companies and pension providers often refer to this data in their online modelling. We urge individuals who are planning their retirement to take this data into account and to look in more detail at some of the assumptions behind the studies. You will find more here.
Whilst this may sound alarming, we should remember that from April 2024 the full state pension will be £11,502 a year.