Only 9 per cent of savers would be able to live comfortably in retirement on current projections, according to Pensions UK’s updated Retirement Living Standards.
The annual standards, calculated by the Centre for Research in Social Policy at Loughborough University, show that a minimum retirement lifestyle costs £13,900 a year for a one-person household and £22,500 for two people. A ‘moderate’ lifestyle costs £32,700 for one person and £45,400 for two, while a ‘comfortable’ lifestyle costs £45,400 and £62,700 respectively.
The figures reflect increased everyday costs across spending categories such as food, essential household bills and transport, as well as the social activities and hobbies.
Pensions UK expected that at current standards, around 82 per cent of the working population would reach the minimum standard of living in retirement. However, this falls to just 23 per cent reaching a moderate standard, and just 9 per cent reaching comfortable standards of living.
The standards have been updated shortly following the publication of an interim report by the government’s Pensions Commission, which identified systemic retirement under saving in the UK economy, and is actively considering whether minimum rates of saving within automatic enrolment schemes need to rise in the future.
Zoe Alexander, executive director of policy and advocacy at Pensions UK, says: “The latest update to the Retirement Living Standards underlines a clear reality for many people, today’s saving levels will not be enough for the retirement they expect.
“That is out of step with what people expect for their future. Without action, too many risk facing a cliff-edge drop in income when they stop work.”
The Pensions UK report also acknowledged that state pension continues to play a central role in retirement income. The full new State Pension is £241.30 a week in 2026/27, around £12,548 a year.
