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How much money do I need to retire in the UK?

As a Chartered Financial Planning Firm in Scotland, one of the most common questions we hear is “How much money do I need to retire in the UK?”. And the answer is, it depends.

Everyone should base their pension savings goals and their retirement planning on their own unique lifestyle. That’s what we do for all of our clients at Lomond Wealth.

However, as a starting point, new research by the Pensions and Lifetime Savings Association (PLSA) offers some great general examples of how much money you need to retire in the UK.

The goal of the PLSA is to provide general retirement figures for UK savers, which you can use to set your own personal retirement targets – based on your desired quality of lifestyle and ambitions for retirement.

To help give you an idea of how much money you need to retire in the UK, let’s take a look at three examples of ‘Retired Living Standards’ from the PLSA, and what they might cost.

 

A MINIMUM STANDARD OF LIVING IN RETIREMENT IN THE UK

Maybe you don’t think you’re going to have much of a workplace pension or private pension at retirement? Or maybe you just can’t wait to stop working as soon as possible? If so, you might be wondering “What is the minimum pension I need to retire in the UK?”

The PLSA describes the ‘minimum’ lifestyle in retirement as covering all your basic needs, with a little left over for socialising etc.

What is the minimum pension I need to retire in the UK?

According to the PLSA, a single person would need £14,400 per year while a couple would need £22,400 per year as a minimum in retirement.

What does a minimal retired lifestyle look like?

You can find more detail about what is included in a minimal level of retirement here:

What is the minimum pension I need to retire in the UK?

 

A MODERATE STANDARD OF LIVING IN RETIREMENT

Compared to the minimum, a ‘moderate’ retirement lifestyle offers you a little more flexibility in certain areas of life.

The PLSA describes the ‘moderate’ lifestyle in retirement as covering your basic needs, plus the opportunity to do more of the stuff you really enjoy.

What size pension do I need for a moderate retirement in the UK?

To maintain a moderate lifestyle in retirement, according to the PLSA, a single person would need £31,300 per year while a couple would need £43,100 per year.

What does a moderate retired lifestyle look like?

You can find more detail about what is included in a moderate level of retirement here:

What size pension do I need for a moderate retirement in the UK?

 

A COMFORTABLE STANDARD OF LIVING IN RETIREMENT

Compared to a moderate standard of living in retirement, a ‘comfortable’ retirement lifestyle includes more financial confidence.

You’ll cover you’re basic needs and have money left over for the things you really enjoy in life. Plus, the PSLA describes the comfortable retirement lifestyle ‘being able to be more spontaneous with your spending’.

How big a pension do I need to live comfortably in the UK?

According to the PLSA, a single person would need £43,100 per year, or £59,000 for a couple, to enjoy a comfortable retirement.

What does a comfortable retired lifestyle look like?

You can find more detail about what is included in a comfortable level of retirement here:

How much money do I need to retire comfortably in the UK?