Costs for a basic standard of living in retirement have increased over the last year by almost 20% due to high inflation.
In the latest inflation update of the Pensions and Lifetime Savings Association’s Retirement Living Standards, people on the Minimum lifestyle have seen the biggest percentage increase to the cost of their retirement, owing to the higher proportion of their budget going towards the things that have risen the most in price: food and energy.
The Retirement Living Standards are based on independent research by the Centre for Research in Social Policy at Loughborough University. They describe the cost of three different baskets of goods and services. These baskets comprise six categories: household bills, food and drink, transport, holidays and leisure, clothing and social and cultural participation.
The cost of a Minimum lifestyle increased from £10,900 to £12,800 – or 18% – for a single person and from £16,700 to £19,900 – or 19% – for a couple.
The Moderate level increased 12% to £23,300 for a single retiree and by 11% to £34,000 for a couple. The Moderate Retirement Living Standard, in addition to the Minimum lifestyle, provides more financial security and more flexibility.
At the Comfortable Retirement Living Standard, retirees can expect to have more luxuries like regular beauty treatments, theatre trips and three weeks holiday in Europe a year. At this level, the cost of living increased 11% to £37,300 for one person and 10% to £54,500 for a two-person household.
Use the Lifestyle Calculator to work out what income you might need
You can use our Lifestyle Calculator help you estimate how much you’ll need in retirement.
The calculator takes into account the Retirement Living Standards and allows you to tailor the costs to your own circumstances and what feels appropriate for you. You’ll then get a personal target to aim for.
Track your progress
You can find out whether you’re on track to meet the income suggested by the lifestyle calculator by checking your benefits in your DB account or DC account.
Once you’re logged in, you can request an estimate of your retirement benefits to see what you’re forecasted to receive from your pension.