How much does a good retirement cost in the UK today?
Every year the Retirement Living Standards body in the UK publishes its latest estimates of the annual income pensioners need for retirement. They categorise living standards in terms of Minimum, Moderate and Comfortable for single and two-person homes.
It’s a very useful report, offering not just headline numbers but detail of how the researchers define the three levels of living standards, around those factors that are important to many retirees: house, food, transport, holidays and leisure, clothing and personal, and ‘helping others’.
The costs that the researchers choose to focus on are the result of ongoing discussions with people around the country about their expectations for requirements. That means we can put some trust in the work being done here to give us a good idea of how much we need to save now.
As the programme has been running for some years now, the researchers can compare year on year to see how and why there are changes.
The results for 2025 are mixed. The cost of the Minimum retirement lifestyle has actually fallen, down to £21,600 per year for a two-person household, due to the impact of lower energy prices and changes in the public’s expectations for this standard. The good news is that this basic lifestyle can be covered by the State Pension for two people in receipt of the full pension.
On the other hand, the Moderate and Comfortable standards have risen modestly, reflecting the impact of inflation across many expenditure categories offset by decreases in energy costs. Anyone aiming to enjoy these higher levels of lifestyle will need to supplement their State Pension with their own pension income or savings.
The PLSA’s web site offers clear information about how they have calculated costs and retirement income, and signposts for anyone who wants more information about how to plan for their retirement.