Research from the Pension and Lifetime Saving Association, has indicated that the pandemic will mean we need to find an extra £2,200 a year to keep up a comfortable retirement lifestyle after the pandemic. The research has shown that spending priorities have changed with retirees now wanting to spend more money on dining out and subscriptions.
The Pension and Lifetime Savings Association’s ‘retirement living standards’ published today are designed to give savers a picture of how much money you will need to keep enjoying your spending habits and favourite brands.
The annual budget for the minimum standard has risen since 2019 by £700 to £10,900 for a single person and by £1,000 to £16,700 for a couple in 2021.Through a combination of the full state pension of £9,339 per year, and auto-enrolment in a workplace pension, this level should be very achievable for most people.
The annual budget needed for a comfortable retirement living standard has increased since 2019 by £600 to £33,600 for one person and £2,200 to £49,700 for a couple. About one in six single employees are projected to have an income between moderate and comfortable.
The lockdown has proved that individuals still want to participate in the world through every day and routine ways such as seeing friends and family, going out for something to eat, taking an annual holiday and other social events. The pandemic also highlighted the importance of economic security as well as social and cultural participation in retirement. As the cost of living is rising, the financial strain of the pandemic could mean many now cut down on pension saving.
“The PLSA have provided these guidelines to reflect the real-world price changes and real-world expectations about lifestyles in retirement. We hope these guidelines will make people think about whether they are saving enough. If you would like to have a comfortable standard of living in retirement then you might need to think about saving a bit more in your pension if you can afford to.”
Stuart Belcher, Co-Founder at Resolve Financial Solutions.
If you would like to discuss your retirement plans and ensure you have enough money for your retirement, then please get in touch.