New research suggests some retirement costs have fallen, but there is a twist…
We talk to Karl Hartey, Chairman of Hartey Wealth Management, to find out more.
How much net income do you need each year for a minimum, moderate or comfortable living standard in retirement? Every year since 2019, the Pension and Lifetime Savings Association (PLSA), working in conjunction with Loughborough University, has provided the answer to this very question and in June, the latest calculations were published:
Table 1: PLSA income calculations on living standards 2023–2025
| Living standard | One-person | Two-person | ||
| 2023/24
£ |
2024/25
£ |
2023/24
£ |
2024/25
£ |
|
| Minimum | 14,400 | 13,400 | 22,400 | 21,600 |
| Moderate | 31,300 | 31,700 | 43,100 | 43,900 |
| Comfortable | 43,100 | 43,900 | 59,000 | 60,600 |
These figures are based on people living outside London; add between £1,300 and £3,200 a year if you live in London.
One notable change from 2023/24 is that the minimum standard figures have dropped. This is due to the PLSA figures being based on an April date, so the 2024/25 figures benefited from the sharp fall in energy costs between April 2023 and April 2024. Since April 2024, energy costs have risen: the April 2025 Ofgem price cap was 9.4% higher than its April 2024 counterpart.
In any case, the chances are that you wouldn’t choose the minimum standard. In the words of the PLSA, the minimum standard “covers all your needs, with some left over for fun”. Not much fun though! The minimum standard assumes no car, a week’s holiday in the UK and £30 a month per person for eating out. Whereas the comfortable standard has a three-year-old small car, a fortnight four-star, half-board Mediterranean holiday and three long UK weekend breaks, and £42 a week per person for eating out.
As Table 2 shows, the comfortable standard requires a large pension income. This year, for the first time, the PLSA has split out the pre-tax pension required to reach each of its standards.
Table 2: PLSA income calculations on living standards 2023–2025
| Standard | Total
Yearly expenditure £ |
State
pension (per person) £ |
Private pre-tax pension
(per person) £ |
Total pre-tax pension income
(per person) £ |
| Minimum | 21,600 | 11,975 | – | 11,975 |
| Moderate | 43,900 | 11,975 | 12,320 | 24,295 |
| Comfortable | 60,600 | 11,975 | 22,758 | 34,733 |
These figures are based on a two-person household outside London.
So, it might well be time to review your retirement planning now – call Hartey Wealth Management on 0808 168 5866 or visit www.harteywm.co.uk to book an appointment.
The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested.
The above was provided by Hartey Wealth Management Limited. Registered office: Hilliards Court, Chester Business Park, Chester, CH4 9QP.
Hartey Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority.
