- The Pension and Lifetime Savings Association publishes its ‘Retirement Living Standard’ report today
- Couples in the UK would need to find an additional £2,200 per year to maintain a ‘comfortable’ retirement lifestyle
- Retirees now want to eat out and spend more money on haircuts, and insist on a Netflix subscription
- The report aims to tell savers how much money they will need to continue enjoying the spending habits
Couples will now need to find an additional £2,200 a year to maintain a comfortable retirement lifestyle after the pandemic, after the pension industry’s guidelines for spending expectations were revised in the wake of Covid.
This means couples would need a further £54,400 and pension savings totaling almost a quarter of a million pounds to enjoy an £8 bottle of wine, two annual holidays in Europe and a restaurant budget of £500 a month Can you
The research also revealed how spending preferences have changed, with retirees now looking to splurge more cash on dining out and getting haircuts, and pushing for a Netflix subscription.
It comes as Britain faces a living crisis while energy bills soar ahead of winter. The Bank of England expects inflation to exceed 4 percent by the end of the year and supermarkets have warned of a 5 percent price hike.
The Pension and Lifetime Savings Association’s ‘Retirement Living Standards’, published today, are designed to give savers a picture of how much money they will need each year to maintain their spending habits and enjoy favorite brands.
PLSA’s retirement living standards are set at three different levels – minimum, medium and comfortable.
Single: The annual budget for the minimum standard has increased from £700 to £10,900 for an individual since 2019
Pairs: The annual budget for the minimum standard has increased since 2019 from £1,000 for a couple in 2021 to £16,700
The study, independently developed and maintained by the Center for Research in Social Policy at Loughborough University, details everything from brands of beer to their summer vacation destination.
The retirement standard of living has been categorized into three different levels – minimum, medium and comfortable.
What goods, services and activities are included in retirement to provide a standard of living?
- Household bills (eg water, council tax, insurance, electricity)
- Telephone bill (landline and mobile) and line rental
- decoration and maintenance
- Furniture, cleaning supplies, lightbulbs, cooking utensils, appliances (eg fridge, washing machine), garden supplies, towels, bedding, etc.
- Gardener/cleaner/window cleaner (if applicable)
- Funeral plan (if applicable)
- eating a budget
- beer and wine
- Car (if applicable)
- Railcard and Train Travel
- the cab
Holidays and Holidays
- TVs, DVD players, laptops, printers, speakers, CDs and stationery supplies
- TV license and subscription
- Vacations, Spending Money and Passports
clothing and personal
- clothing and shoe budget
- Cosmetics, toothbrushes, toothpaste, shaving supplies, hair styling, beauty treatments (if applicable), suitcases, umbrellas
- Dentist, Optician, Podiatry, Minor first aid (eg ointments, paracetamol)
to help others
- gifts for others
- helping others (if applicable)
- charitable donation
The researchers conducted 13 discussion groups with people from across the UK, including both retirees and those over 55 approaching retirement.
The minimum retirement living standard covers the basic needs of a typical retiree and is sufficient for some fun.
This includes a week off in the UK, eating out about once a month and some affordable leisure activities about twice a week.
This does not include the budget for driving the car.
The annual budget for the minimum standard has increased from £700 to £10,900 for an individual in 2019 and from £1,000 to £16,700 for a couple in 2021.
PLSA said that through a combination of a full state pension of £9,339 per year and auto-enrollment in the workplace pension, this level should be very achievable for most people.
The minimum basket includes an increase in the budget for hairdressing, from £15 to £25 for women and £8 to £10 for men, as well as the inclusion of Netflix.
Medium retirement living standards provide greater financial security and flexibility.
For example, one might take a two-week vacation in Europe and eat out several times a month.
The annual budget for the medium standard has increased from £600 to £20,800 for an individual and £1,500 to £30,600 for a couple from 2019 onwards.
The eating out budget, which increased from £75 per person per month to £100 per person per month, made a substantial increase.
The budget for social activities was increased from £35 to £50 per week, with Netflix adding to the price inflation in leisure services and leisure goods.
PLSA said about half of single workers are on track to expect a lifestyle between minimal and moderate — and couples who are able to share costs will be higher in this range.
At a comfortable retirement living standard, retirees can expect to enjoy some luxuries such as regular beauty treatments and theater visits.
The annual budget required for a comfortable retirement living standard has increased from £600 to £33,600 for an individual and £2,200 to £49,700 for a couple since 2019.
Nearly one in six single employees is estimated to have an income between moderate and comfortable.
The cost of annual maintenance and servicing of burglar alarms was included in the Comfort standard for the first time.
Pensioners and savers told researchers that the pandemic had forced them to rethink retirement.
One man from Wales said he had no idea how important it was to eat out for ’emotional well-being’.
Another said their partner’s quality of life would not be the same without Netflix, adding: ‘These things were a luxury, but in some circumstances they become a necessity.’