A PENSION update has been announced, as new UK Retirement Living Standards were published today. As a result, many Britons will want to know how much a comfortable retirement will cost them.
Many people have specific goals for their retirement. They may wish to travel the world, take up an exciting hobby, or start home improvements, drawing upon the state pension or other savings to progress. Regardless of the ambitions a person has for later life, it can be difficult to determine how much all of this will end up costing. In an effort to help Britons understand the kind of lifestyle they want, and how much it will actually cost them, new Retirement Living Standards have been published by the Pensions and Lifetime Savings Association (PLSA).
The new report has been released by the PLSA in collaboration with Loughborough University, and describes different standards of living, pitched at minimum, moderate, and comfortable.
They describe the cost of three different baskets of goods and services, established by what the public considers realistic and relevant expectations for retirement living. The baskets comprise household bills, food and drink, transport, holidays and leisure, clothing and social and cultural participation.
It has been proposed the minimum standard of living could cost £10,900 for a single person, rising to £16,700 for couples.
This is compared with the current full new state pension which is approximately £9,339.20, and in addition to auto-enrolment workplace contributions, it is hoped most Britons will have enough to get them by.
For a “minimum” standard of living, a single person can cover all of their needs, but with no car, a £41 weekly food shop, and £10 allocated for each birthday present for others. Couples living a “minimum” standard of living would have a similar allowance, with a £67 weekly food shop.
Meanwhile, the standards state a moderate lifestyle would cost £20,800 for singles, and £30,600 in a step up – providing more financial security and flexibility. For example, a person could have a two-week holiday in Europe and eat out a few times a month.
For a single person, the moderate sum is £20,800, rising to £30,600 per couple. The annual budget for the moderate standard has risen since 2019 by £600 for a single person and by £1,500 for a couple.
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