Skip to main content
  • Register
  • Help
  • Contact us
  • Log out of your HL account

How much do you need to live comfortably in retirement?

We all have dreams about what our retirement might look like, yet the majority of us don’t know how much income we’ll actually need when we get there. We reveal three national income targets which could help.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Most people strive to live comfortably in retirement. But how much you’ll need to live on, and so need to save for the future, can be hard to pin down.

Industry research suggests that 77% of savers don’t know how much income they’ll actually need when it comes to their retirement. And only 20% are confident they are saving enough.

To help simplify saving for retirement, the Pensions and Lifetime Savings Association (PLSA) has launched retirement living standards. These have been designed to help people picture what lifestyle they want in the future, and how much income they’ll need to achieve that lifestyle.

What are the standards?

The PLSA has proposed three living standards; minimum, moderate and comfortable.

For a single person to reach a minimum standard of living they would need a yearly income of £10,200. A couple would need £15,700. This amount would allow for some social occasions, but means you wouldn’t be able to afford a holiday abroad or the cost of running a car.

To reach a moderate lifestyle a single person would need an annual income of £20,200 and a couple would need £29,100. This standard will allow you to spend more money on any nice-to-haves. You’d be able to afford a two week holiday in Europe every year, and run a relatively new car.

At the comfortable living standard (£33,000 a year for a single person and £47,500 for a couple) you’d be able to enjoy a more lavish retirement. This includes taking an extended trip abroad, running a newer car that can be replaced regularly and spending more on weekly food shops and personal items like clothing.

Scroll across to see the full table.

Single person yearly income* Minimum



House work DIY and decorating one room every year Some help with
and decorating
each year
Up-to-date kitchen
and bathroom every
10/15 years
Weekly food shop £38 each week £46 each week £56 each week
Transport No car 3 year old car replaced every 10 years 2 year old car replaced every 5 years
Holidays 1 week and a long
weekend away in
UK every year
2 weeks in Europe
and a long weekend
in the UK every year
3 weeks in Europe every year
Clothing & footwear £460 every year £750 every year £1,000-£1,500 every year
Birthdays £10 for each birthday present £30 for each birthday present £50 for each birthday present

Source: PLSA, 17 October 2019. *These figures could fund this lifestyle for people living outside London.

The figures provide a rule of thumb and everyone’s financial circumstances are different. You may need to add other costs depending on your circumstances such as mortgage, rent, social care costs and income tax.

Most people dream of a comfortable living standard when they finish work, but are savers putting away enough money to reach this?

Reaching a comfortable living standard

51% of savers believe the minimum auto enrolment amount (8% of qualifying earnings including an employer contribution of at least 3%) is enough to hit the comfortable standard in retirement. Unfortunately this isn’t the case.

In reality, if an 18 year old started their working life today earning £18,000, paid a total of 8% of their salary into their pension, and were entitled to the full state pension amount, by 68 they’d end up with an annual retirement income of £19,100 a year. This is just within the moderate standard, but is £13,800 short of the comfortable standard. Without the State Pension they would receive just £4,430, which is less than half of the minimum standard (though most people who are eligible for auto-enrolment are eligible for the State Pension).

But what if you’re not just starting out?

In order to reach a comfortable standard, a 35 year old today who is a higher earner (£46,000 per year), and has already built up a decent pension pot of £50,000, would still need to pay a total of 19% of their salary into their pension each year starting today, plus be entitled to the full state pension.

These examples assume an average investment growth rate of 5% and a 3% inflation rate. They do not take into account changes to salary. Pension and tax rules may also change in future.

Will the future you want, be the future you’ll get?

The living standards have been created to help you think realistically about what you’ll need or want to spend your money on.

To help you understand if your pension is on track to give you the retirement income you want, our calculator will show you what your pension could pay each year.

If you’re not on track, you could consider increasing your pension contributions or delaying your retirement.

Don’t forget once you pay money into your pension, you can’t take it out again until you’re at least 55 (57 in 2028).

Pension calculator

More on paying into a pension

What help is available?

If you have any questions our Helpdesk is always happy to help and is available six days a week on 0117 980 9926. Monday-Thursday 8am-7pm, Friday 8am-6pm and Saturday 9:30am-12:30pm.

What you do with your pension is an important decision. We strongly recommend you understand all your options and check that the option you choose is right for your circumstances. Take advice or seek guidance if you’re unsure.

The government provides a free and impartial service to help you understand your retirement options - more on Pension Wise.

This article isn’t personal advice. We offer a range of information and support to help you plan your own finances. We also have an award-winning advisory service that can help you achieve your goals.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Daily market update emails

  • FTSE 100 riser and faller updates
  • Breaking market news, plus the latest share research, tips and broker comments

Related articles

Category: Investing and saving

7 costly mistakes people make when choosing a financial adviser

We look at some common pitfalls when choosing an adviser and explain how our approach can help avoid them.

Bruce Pearce

23 Jan 2020 min read

Category: Investing and saving

How inflation eats away at your savings and how to beat it

Why it’s important to consider inflation and how to get some of the best savings rates so your cash isn’t losing value.

Ryan Kenny

16 Jan 2020 4 min read

Category: Pensions

3 tips to cut your tax bill before the end of January

With the online tax return deadline looming, we look into last-minute ways you can cut your tax bill this January.

Edie Bond

16 Jan 2020 4 min read

Category: Investing and saving

5 reasons why pensions are more popular than ever

We look at 5 reasons that could explain why pensions are becoming more popular.

Michelle Branco

15 Jan 2020 4 min read