Back in February, the Pension and Lifetime Savings Association (PLSA) released its latest ‘Retirement Living Standards’ report. It looked at the size of retirement funds needed to secure a minimum, moderate, and comfortable level of retirement.

The cost of living crisis loomed large, reflected in rising fund requirements at all levels as well as in consumer frustration and higher expectations.

By evaluating the difference in fund value required for different types of retirement, as well as for single retirees compared to couples, Standard Life used the report to highlight a clear relationship retirement gap.

Keep reading for a closer look at the report’s findings, why you might need to save more as a single pensioner, and how financial advice can help.

A single pensioner needs to find an extra £277,000 for even a “moderate” retirement lifestyle

The latest iteration of the ‘Retirement Living Standards report’ used in-depth discussion groups comprising UK adults from across the nation. It looked at how Brits measured different living standards and then calculated how much each lifestyle would cost each year.

With this data as a starting point, Standard Life then calculated the size of the pension pot required in each case.

The PLSA defines each lifestyle roughly as follows:

• A minimum retirement living standard means having enough not just to survive month-to-month, but to live with dignity. This includes enough money for weekly groceries, a UK holiday each year, and a meal out once a month.
• Moderate retirement living standards include all of the above, but with slightly more to spend on groceries, weekly meals out and a European holiday each year. This retired household will also likely run a second-hand car.
• A comfortable retirement lifestyle includes an increased food budget, plus luxuries like theatre trips and two weeks abroad each year.

The annual cost of living in this final category is calculated at £43,100 for a single pensioner and £59,000 for a two-person household.

Standard Life found that a single pensioner would need around £277,000 more in their pension pot than a comparable couple to secure even a “moderate” retirement living standard.

The gap widens even further for a comfortable retirement but you’ll be looking for more than comfort

To live a comfortable lifestyle in retirement as a single person, the report suggests that you’ll need a pension pot of around £890,000. This compares to a two-person household, where each individual will need to carry just £492,500 into their joint retirement – a difference of more than £397,000.

But after a long career and decades of hard work, you’ll likely be looking for more than a comfortable retirement. And that’s where advice can help, in three key ways:

1. Encouraging you to start saving early

The simplest way to achieve your dream retirement is to take the time to think about what that retirement looks like, and then start saving toward it early.

Saving earlier means that you’ll have time to make contributions, the more investment growth you’ll hopefully see, and the longer the effects of compound growth will have to take hold.

You’ll also find that you can afford to put aside a smaller percentage of your income, helping you to stay focused on the present while looking after your future self, whatever that future looks like.

Remember that pensions are incredibly tax-efficient so make the most of yours as early in your career as possible.

2. A tailored plan based on you and your goals

Working with The Pension Planner, you’ll know that you’re dealing with experts in their field.

Through a free, no-obligation discussion, we will take the time to get to know you, your circumstances, and your long-term goals. And then help you to put a plan in place that sets you on the path to your dream retirement.

Your tailored plan will align with your goals, your attitude to risk, and the lifestyle you want to live.

3. Regular reviews to help you adapt to change

Once your plan is in place, we’ll continue to work with you on an ongoing basis, building a long-term relationship.

That means we’ll be on hand to make regular reviews, giving you reassurance that your plans are still on track, or advising you of small changes if and when they are needed.

Whatever life throws at you, your plan will be robust enough to adapt to life milestones, events, and changes beyond your control. But always with your dream retirement lifestyle in mind.

Get in touch

If you need help managing your long-term retirement plans, get in touch. Email info@thepensionplanner.co.uk or call 0800 0787 182.

Please note:

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.