RETIREES NEED £44K FOR A ‘COMFORTABLE’ LIFE. HOW ARE THE REST OF US MEANT TO MANAGE?

A person living alone in retirement needs to spend £43,900 a year to live at a “comfortable” standard, according to new figures released by the Pensions and Lifetime Savings Association (PLSA).

This figure is calculated by researchers at Loughborough University and is based on discussions with members of the public from across the UK.

Crucially, the number is after tax – it’s the take-home pay someone receives – and it is also based on a pensioner who has no housing costs. No mortgage and no rent to pay.

For many, this top level retirement living standard will be a very difficult to achieve.

It probably involves saving between £540,000 and £800,000 into a private pension throughout your life, if you want to secure that income via a product known as an annuity.

But if you think it’s hard for someone in later life, have a think about what it means for those still working.

Unlike pensioners, people under 66 pay national insurance (NI) on their earnings in addition to income tax – so to muster up take home pay of £43,900, they will probably have to earn £57,500.

But there’s more. They probably also need to pay into a pension too – so they can have a reasonable retirement in their later years.

Retirement firm Scottish Widows recommends paying 12 to 15 per cent of income into a pension, but if we assume an employer pays 3 per cent in, the worker needs to contribute 9 per cent.

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To get that £43,900, they now need to earn around £63,400.

What if they have a student loan? NIne per cent of a chunk of their income also goes towards that too. Now, to reach that hallowed £43,900 figure, they need to be earning around £70,600.

And I’m afraid it does not stop there.

The average UK private rent is £1,326, or £15,912 per year. The average mortgage is slightly more.

While it’s reasonable to assume most pensioners won’t be paying housing costs, the same sadly can’t be said for most under-65’s.

Households with some residents aged 65 years and over were 4.4 times more likely to own outright in the most recent census data, with just under 70 per cent in England doing so.

So the income needed for that comfortable lifestyle after that £15,912 of rent is factored in? Just shy of £106,000.

Let’s remember as well that working age people don’t generally get the discounts and concessionary travel that pensioners get either.

So how affordable is that comfortable lifestyle for most people outside of retirement? Not very – the average UK wage is somewhere between £35,000 and £40,000.

The PLSA figures aren’t plucked from nothing though. They’re based on peoples’ expectations for the sort of lifestyle they would believe to be comfortable, and the money they would need for that.

They include enough for a two-week four star half board holiday in the Mediterranean with around £100 per person per day spending money, and three long weekend breaks in the UK with £400 spending money per break, and strong budgets for home repairs, food and clothing.

Of course, this “comfortable” lifestyle is the top end of the spectrum – the most desirable standard of living imaginable, that most of us won’t be able to meet.

It should be noted that a “minimum” lifestyle can be achieved on £13,400 a year and a “moderate” one for £31,700, according to the PLSA but that of course means fewer holidays, clothes and disposable income.

The figures are also lower for those who live in couples, rather than on their own.

What the numbers show, however, is how far most people in the UK are from living the sort of lifestyle that we deem as a population to be comfortable.

And the real question posed is this. How can we get people to save enough for this sort of retirement, years away, when they cannot even get close to what they perceive as comfortable in the here and now?

2025-06-04T09:34:11Z