The latest Retirement Living Standards (RLS) stats are out, revealing what incomes and savings retirees will need to enjoy “Moderate” and “Comfortable” standards – and both show modest increases
The figures reflect the impact of inflation across many expenditure categories offset by decreases in energy costs, and provide those planning their retirement finances a highly useful indicator of what they will need to save in the years before they intend to give up work.
The good news, meanwhile, for those who are only expecting a “Minimum Retirement Living Standard”, have actually decreased – for a one-person household by £1,000 per year to £13,400, while for a two-person household, it is £21,600.
Calculated by the Centre for Research in Social Policy at Loughborough University on behalf of the PLSA, the Retirement Living Standards show that the fall in energy prices has been a helpful fillip to everyone’s finances, dropping by more than a quarter since the 2023/2024 figures were collated.
The new figures for Moderate and Comfortable standards are:
| One-person | Two-person | |
| COMFORTABLE | £43,900 | £60,600 |
| MODERATE | £31,700 | £43,900 |
| MINIMUM | £13,400 | £21,600 |
Maintaining standards
The RLS, says the Pensions and Lifetime Savings Association, remain a guide to the costs of living in retirement – not a fixed savings target. Those making use of the Standards as a planning tool are encouraged to tailor them to their lifestyle.
Zoe Alexander, their Director of Policy and Advocacy, said: “For many, retirement is about maintaining the life they already have… not living more extravagantly or cutting back to the bare essentials.
“The Standards are designed to help people picture that future and plan in a way that works for them.”
Calculating the necessary pension pot…
Of course, key to ensuring that retirees enjoy the standard of living their aspire to is knowing how big their pension pot will need to be.
The chart below provides an approximate guide to the level of annual private income or pension savings that might be required to meet each Standard – based on converting a defined contribution balance into an annuity during April 2025.
It also assumes you’re receiving the full State Pension and have no rent or mortgage costs.
Of course, there are many ways to draw on pension savings – so this guide should be treated as indicative only.
TWO-PERSON HOUSEHOLD
| Retirement Living Standard | Annual Expenditure (Two-Person) | State Pension* (per person) | Pot Income Pre-Tax (per person) | Total Income Pre-Tax (per person) | Total Income Post Tax (per person) | Approx Fund Size Required (per person) if Purchasing an Annuity** |
| COMFORTABLE | £60,600 | £11,975 | £22,758 | £34,733 | £30,300 | £300k-460k |
| MODERATE | £43,900 | £11,975 | £12,320 | £24,295 | £21,950 | £165-250k |
| MINIMUM | £21,600 | £11,975 | – | £11,975 | £11,975 | £0 (fully covered by the state pension) |
*Full state pension for 2025-26
**Rounded illustrative indicative figures based on annuity rates ranging from £5,000 to £7,500 per £100,000. Rates vary according to the type of product and saver circumstances including location and health. Provided as an illustration only, annuity rates change frequently.
ONE-PERSON HOUSEHOLD
| Retirement Living Standard | Annual Expenditure | State Pension* | Pot Income Pre-Tax | Total Income Pre-Tax | Total Income Post Tax | Approx Fund Size Required if Purchasing an Annuity** |
| COMFORTABLE | £43,900 | £11,975 | £40,245 | £52,220 | £43,900 | £540k-800k |
| MODERATE | £31,700 | £11,975 | £24,508 | £36,483 | £31,700 | £330k-490k |
| MINIMUM | £13,400 | £11,975 | £1,632 | £13,608 | £13,400 | £20k-3k |
*Full state pension for 2025-26
**Rounded illustrative indicative figures based on annuity rates ranging from £5,000 to £7,500 per £100,000. Rates vary according to the type of product and saver circumstances including location and health. Provided as an illustration only, annuity rates change frequently.
Professor Matt Padley, Co-director of the Centre for Research in Social Policy at Loughborough University, said: “In these uncertain times, the RLS help people to think in more concrete ways about what they want their retirement to look like, and how much they will need to live at this level.”
Zoe Alexander, Director of Policy and Advocacy at the Pensions and Lifetime Savings Association, added: “This year’s findings show that costs can go down as well as up. But planning matters more than ever.”
How can your RetireEasy LifePlan help YOU achieve your desired living standard?
Everyone’s aspirations for their retirement will be as individual as they are, so the PLSA standard figures are a great place to start; but if you want more granularity in your planning, the RetireEasy LifePlan can help you achieve that… and help you build plenty of flexibility into your plans to allow for shifts in inflation or annuity rates.
Just key in your data and the LifePlan will tell you at a glance whether or not (on their current growth trajectory) your pensions, savings and investments will be able to meet your spending expectations.
You can also build in allowances for major decisions – such as downsizing, remaining economically active for longer or retiring early – and test out those scenarios.
If the figures look like falling short, then you have time to make adjustments to how much you are saving or when you retire. If you look like overshooting… happy days! You have elbow room for a luxury item or helping a family member.
