New retirement living standards to give idea of goals for saving

A set of “retirement living standards” to help people set savings goals for later life, by giving them a clearer idea of how much cash they might need, has been launched.

The standards, launched by the Pensions and Lifetime Savings Association (PLSA), are designed to give people a picture of the kind of lifestyle they may have on a minimum, moderate or comfortable retirement income.

It is hoped the standards will resonate with pension savers in the same way that being told to eat “five a day” has encouraged fruit and vegetable consumption.

The minimum standard assumes a single person would have an annual income of around £10,000 or £15,000 for couples.

Someone with a moderate retirement income would have in the region of £20,000 as a single person or £30,000 as a couple to live on.

The benchmark for a comfortable retirement income is £30,000 per year for individuals and £45,000 for couples.

The PLSA represents more than 1,300 pension schemes.

It said someone on a minimum standard may typically expect to afford a £38 weekly food shop, rising to £46 for someone on a moderate income and £56 on a comfortable income.

On a minimum retirement income, it may be hard to afford to run a car.

The basis is research by Loughborough University.

It said through a combination of the full state pension of £8,767.20 per year, and autoenrolment in a workplace pension, the minimum level should be achievable for most people.