How pension pot affects your Christmas spread

From a 29p stuffing to £10 pudding, the great dining divide

WILL your pension put smoked salmon and sourdough on the Christmas table, or will you have to settle for budget supermarket pate and white bread?

The pensions industry has produced research to show what your retirement savings mean for your festive plate.

Those with minimal savings, who will rely almost entirely on the state pension, will be able to spend an estimated £36.20 on food and drink – including £2.99 wine and mince pies from Aldi, and a frozen turkey breast from Tesco.

But those with healthy pension savings can afford to spend more than £200 on a feast including £8 reserve wine, a turkey crown and cheeses from Sainsbury’s.

The Pension and Lifetime Savings Association (PLSA) research, by Loughborough University, splits retirement lifestyles into

‘Need an annual income of £33,600’

three income categories – minimum, moderate or comfortable.

All three include the state pension, which is worth more than £9,000 a year. The rest of the annual spending is made up from private retirement savings.

The pension trade body says a single pensioner hoping to enjoy a Christmas feast worthy of a comfortable retirement lifestyle will need an annual income of £33,600 to be able to afford to budget £202 for a festive feast.

Retirees with an income of £10,900 a year can afford the minimum standard budget of £36.20, while those with a moderate income of £22,800 can spend over £100 on Christmas dinner.

Nigel Peaple, director of policy and advocacy at the PLSA, said: ‘The good news is that pretty much everyone, thanks to the state pension, will more or less achieve the minimum level, especially if they are able to share costs in a couple.

‘And if you are one of the 80 per cent of employees who save in a workplace pension, and you are on average earnings, you will be well on the way to achieving the moderate level.’

The research reveals that those with a ‘minimum’ standard of retirement living will be shopping at Aldi and Tesco for Christmas. Those living a ‘moderate’ retirement will buy most of their festive food from Tesco and Morrisons.

And retirees enjoying a ‘comfortable’ standard of living will be able to splash out on groceries from Sainsbury’s and M&S. It comes after research from retail analysts Kantar last week revealed the cost of Christmas dinner for four, with fizz and pudding, had increased 3.4 per cent to reach £27.49.

The ‘retirement living standards’ are designed to give savers an idea of how much money they will need to keep up their spending habits. This year, the PLSA updated its research to reveal couples will now need to find an extra £2,200 a year to maintain a comfortable retirement lifestyle after the pandemic. A ‘comfortable’ lifestyle includes £8 wine, two annual holidays in Europe and a restaurant budget of £500 a month.

But to fund this, a couple would need combined pension savings of nearly £750,000 to buy an annuity that would pay enough.