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

There are a number of reasons you might ask ‘what is the minimum pension I need to retire in the UK?’. You might be worried if you are saving fast enough, or you might want to retire as early as possible by giving up some luxuries in later life.

The Pensions and Lifetime Savings Association (PLSA) estimates that the minimum annual pension income needed to retire in the UK is £14,400 for a single person and £22,400 for a couple.

But in order to answer the question ‘what is the minimum pension I need to retire in the UK?’ we need to understand what a ‘minimal’ lifestyle in retirement might look like according to the PLSA. Because your minimum standard of living might be very different to the PLSA estimates.

What would the minimum pension I need to retire in the UK look like?

The PLSA defines a ‘minimum’ lifestyle as covering all your needs, with some left over for fun and social occasions. Here’s how it breaks down across key areas of life.

HOME CARE

Bills and home contents insurance are covered, your appliances will be from economical brands, and you’ll have a budget of £100 a year to maintain your property with some DIY.

FOOD & DRINK

Food shopping will come in at around £50 per week. This will probably focus on mainstream supermarkets, and primarily buying their own label products and a £5 bottle of wine each week. You’ll also have about £25 a month for dining out, and another £15 every two weeks to treat yourself to your favourite takeaway.

TRANSPORT

Funds for transport will likely not cover the cost of running and maintaining a car. There will be around £10 per week available for taxis, and £100 per year for travelling by rail to visit friends and family further away. Your senior rail card will help add value here, and your free bus pass will be your best friend for your local journeys.

HOLIDAYS

In a minimal retirement lifestyle, you’ll have the chance to discover all the parts of the UK you never visited but always wanted to. A week-long staycation in the UK will be your main option for taking an annual holiday. You’ll have about £500 to cover a one-week, half-board trip, plus approx. £100 spending money.

ENTERTAINMENT

At home you’ll have the basic TV channels and standard broadband, but you’ll also manage to keep up your favourite streaming service, Netflix, Prime Video etc. You’ll also have £20 a week to cover leisure activities away from the house, like a round of golf or a pottery class.

CLOTHING & PERSONAL CARE

We’ll not be looking to London Fashion Week for inspiration, but you will have a healthy £630 for clothing and footwear each year. This might break down like £460 on clothes and £170 for shoes. You’ll also have £40 for haircuts and styling every six weeks. Dental care will be NHS, and any glasses you might need will be a decent mid-range price.

TREATING OTHERS

Finally, even with a minimal retirement fund, life might feel a little sad if you couldn’t treat loved ones or give back to a cause you care about. You’ll have £20 for each birthday and Christmas present, for up to 12 friends and family. If you feel like making an annual donation to charity, you’ll have £50 for that too.

MINIMAL RETIREMENT NOT FOR YOU?

If this sounds a little too minimal for you, check out our blogs that break down two other standards of living in retirement:

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

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