Cost of retirement climbs to £36,480 a year

The cost of a moderate retirement income is £25,000 per year for a single person and £36,480 for a couple, according to data from Hargreaves Lansdown’s savings and resilience barometer, published today. It used headline inflation data to boost the previously published 2023 PLSA Retirement Income Standards by 7.3%. The figures mean retirement costs have soared by a whopping 34.3% per year for a single person and 26.8% for a couple. The amount includes the state pension, which is currently £11,500 per year. The research showed that 38% of households are on track for a moderate retirement income. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Developing pounds and pence estimates for what you need in retirement is a hugely useful tool in helping people work out what they need and how close they are to achieving it. It’s a conversation started by the development of the Pensions and Lifetime Savings Association Retirement Income Standards.” Hargreaves used alternate methodology to the PLSA Retirement Income Standard, which has included more aspirational aspects of retirement lifestyle such as extra days out with family. When publishing its report in February the PLSA said people were placing increasing importance on spending time with family and friends out of the home, which brings its own extra costs. Ms Morrissey said: “These things will be important to many, but not all people, and many live well in retirement on far less. This diversity in approaches needs to be considered.” She said working out how to handle the inflation shock presents an opportunity for the PLSA and industry to engage on what is the best way to help people measure their retirement income needs. Ms Morrissey said: “Even adopting a smaller increase exposes the huge challenges people face in planning for retirement. With only 38% of households on track for a moderate income in retirement - there is clearly much work still to be done to improve pension adequacy.”

Cost of retirement climbs to £36,480 a year - report

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