How much money do I need to retire comfortably in the UK?
“How much money do I need to retire comfortably in the UK?” This is the number one question for most of our clients. Compared to the cost of a moderate retirement, a ‘comfortable’ retirement lifestyle demands a bigger pension, but brings with it another layer of reassurance, luxury, enjoyment, and financial confidence.
The Pensions and Lifetime Savings Association (PLSA) estimates that a moderate lifestyle in retirement would require an annual pension of £43,100 per year while a couple would £59,000 per year.
That’s 37.7% more for a single retiree, and 36.8% for a couple. So, what does a ‘comfortable’ retirement look like according to the PLSA? And what will you get to enjoy as a reward for putting away those extra pension savings over the years?
What does having enough money to retire comfortably in the UK look like?
As well as covering your basic needs and having money left over for the things you really enjoy in life, the PSLA describes a comfortable retirement lifestyle as being able to be more spontaneous with your spending. In other words, you can worry less about splashing out here and there, or when an unexpected cost arises.
Most of our clients are aiming for this level of comfort. They don’t want to spend their retirement worrying over every penny. We can help you get there.
HOME CARE
Naturally, in a comfortable retirement, all your bills are covered easily, and you’ll have a good boiler servicing and white goods cover plan. You can keep your house looking it’s best too, with £900 a year to maintain, decorate, and renovate. This should help you to kitchen and bathroom every 10/15 years. And outdoors, if you don’t have a green thumb, you can afford weekly lawn cutting and some occasional gardening services.
FOOD & DRINK
You’ll have around £70 a week for groceries, buying a 50/50 split of branded and own-branded goods from mainstream supermarkets. You can wind down with a £10 bottle of wine a week and 3 cans of beer each week too. When you don’t fancy cooking, you can dine out up to £40 a week and you’ll still have £20 to order your favourite takeaway. Plus, if you’re generous, you can treat others to a meal out worth up to £100 a month.
TRANSPORT
Having a big enough pension to fund a moderate retirement lifestyle in the UK should cover one used car per household. It will be about three years old when you buy it, and you can look to replace it every 7 years. When you don’t want to use the car, you’ll have about £20 a week for taxis, and you can take 1 or 2 long distance train rides to visit family or a new part of Britain you want to see. Plus, your bus pass is still handy to have.
You’ll be able to pick up a 3-year old car every five years to keep you moving in comfort. There will be up to £200 available each year for long distance train journeys to visit friends and family, which goes further with your railcard. You’ll also have £20 a month if you need to call a taxi.
HOLIDAYS
How does a 2-week all-inclusive trip to the Mediterranean sound? Followed by a long weekend somewhere in the UK? Well, having a big enough pension to enjoy a moderate retirement in the UK should cover for both of these trips. You’ll have around £1400 for holidays each year. Balancing the time of year and hotel ratings will help too.
As part of your comfortable retirement, you can travel with a little more style. Enjoy a 14-night stay at a 4* half-board hotel on the Mediterranean each year, worth £2000. You’ll also be able to explore every corner of the UK, with 3 long weekend staycations each year.
ENTERTAINMENT
At home, you can enjoy an extensive TV and broadband bundle for all you favourite shows, sporting events, and the latest movies. You’ll also have £50 a week to cover two or three leisure activities like golf green fees, theatre tickets, gyms classes or who knows… maybe skydiving is on your bucket list!
CLOTHING & PERSONAL CARE
This is where we see the smallest budget increase compared to the cost of a moderate retirement in the UK. However, this is partly because there was such a big jump up between minimal to moderate living in this area. For clothing and personal care, there isn’t much need to increase this budget to feel more comfortable. You’ll still get £1000 for clothes and £500 for shoes each year. Dental care will still be NHS and glasses in the mid-price-range. Every six weeks, you’ll still have £100 budget for hair dressing, but you’ll have £60 instead of £50 for beauty treatments.
TREATING OTHERS
Enjoying a comfortable retirement in the UK means you can afford to spend a little more freely on loved ones too. On average, you’ll have £50 every month to cover birthday gifts, plus £50 per Christmas gift for up to 12 friends and family. If someone needs a helping hand during the year, you’ll have another £1000 for supporting friends and family, and you can donate up to £300 a year, or £25 a month to your favourite charity.
WHAT’S YOUR IDEA OF A COMFORTABLE RETIREMENT?
We’re experts in creating personalised pension plans that put our clients on the path to a comfortable retirement. But what that looks like, is up to you. Every plan we create is unique, because everyone we work with has their own idea of what a comfortable retirement should be.
Tell us what a comfortable retirement looks like for you, and we’ll show you the way to make it happen. Get in touch today.