New figures from Pensions UK show how much income different retirement lifestyles may now require. They are a useful prompt to check whether your own plans are still on track.
The Retirement Living Standards, calculated by the Centre for Research in Social Policy at Loughborough University, estimate the annual income needed for three different retirement lifestyles: minimum, moderate and comfortable.
For a single person, the figures are now £13,900 a year for a minimum lifestyle, £32,700 for moderate and £45,400 for comfortable.
For a couple, they are £22,500, £45,400 and £62,700 respectively. The figures reflect everyday costs such as food, household bills, transport, leisure and social spending.
Pensions UK expects around 82% of the working population to reach the minimum standard, but only 23% to reach moderate and just 9% to reach comfortable.
This matters because the minimum standard is not the retirement many people have in mind. Without enough private pension saving or other income, some people could face a noticeable fall in income when they stop work.
Pensions UK says current saving levels will not be enough for the retirement many people expect. It also points to the Pensions Commission’s review of whether minimum automatic-enrolment contributions should rise in future.
For us, though, the practical message is more immediate: use the standards as a benchmark, check what you are currently on track to receive and consider whether you can increase contributions. It may also be worth asking your employer whether it will match higher pension contributions.
The State Pension is only the starting point
The full new State Pension is £241.30 a week in 2026/27, or around £12,548 a year. It provides an important base level of income, especially for couples where both people receive the full amount.
For a single person, however, the minimum Retirement Living Standard is £13,900 a year, so the State Pension alone would not fully cover even that level. And once you look beyond the minimum standard, private pensions, savings and investments become much more important.
Pensions UK’s indicative figures suggest that a single person aiming for a moderate retirement could need a defined contribution pension pot of around £335,000 to £505,000. For a comfortable retirement, the range rises to around £560,000 to £845,000.
These figures assume receipt of the full State Pension, no rent or mortgage costs and an annuity-based income. However, retirement income can be taken in different ways and housing costs vary significantly. Someone retiring mortgage-free will have a very different income need from someone still renting or paying a mortgage.
What this means for your retirement plan
The Retirement Living Standards are useful because they turn the abstract question of “how much is enough?” into something more practical. But they are still only broad benchmarks.
Your own retirement number will depend on when you want to stop work, whether you retire gradually or all at once, your housing costs, tax position, health, family circumstances, investment returns and the level of spending you want to maintain.
It is important not to aim blindly for a ‘national’ average. It is to understand what your own version of retirement is likely to cost, what income your pensions and savings may provide and whether there is a gap.
If these figures make you question whether you are on track, speak to us. We can help you compare your expected retirement income with the lifestyle you want, test different scenarios and identify practical steps that could make a difference, from increasing contributions to reviewing your investment approach, retirement date or income strategy.
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