Most people strive to live comfortably in retirement. But how much you’ll need to live on, and need to save for the future, can be hard to pin down.
The cost-of-living crisis hasn’t helped. It’s affecting our day-to-day saving and spending, and we’re seeing longer-term impacts on our retirement planning.
The latest data from our resilience and savings comparison tool showed under half of households are on track for a ‘moderate’ income in retirement – down from July. While it’s only gone down slightly, given it’s taken place over just six months, it’s still a cause for concern.
This article isn’t personal advice. You can’t normally access money in a pension until age 55 (57 from 2028). Pension and tax rules can change, and any benefits depend on your circumstances. If you’re not sure what’s right for you, ask for financial advice.
What are the retirement standards?
A ‘moderate’ retirement income is defined by the Pensions and Lifetime Savings Association (PLSA) as being around £23,300 per year for a single person and £34,000 per year for a couple as of January this year. An income like this covers the potential to go overseas on holiday and to run a car.
These figures include State Pension, which is due to rise to £10,600 in April for those who have accrued the full 35 years of National Insurance credits needed for a full pension. If you have less than this, you’ll receive a lower amount and could consider saving more into your workplace pension to make up the difference.
Many people would expect to be able to enjoy such things like holidays as a matter of course in retirement and they risk facing a nasty shock when they find their retirement reality falls way short of their dreams.
If we drill down into the data further, we see that under saving for retirement is a huge issue, regardless of household income. Just over two thirds of the highest fifth of earners are currently on track. They’re facing a huge decrease in their standard of living in retirement.
What about a ‘comfortable’ retirement?
Only 15% of households are on track for this income and only around a third of the highest earners.
This is defined by the PLSA as being around £37,300 for one person and £54,500 for a two-person household. This standard allows you to spend more on treats like theatre trips and meals out.
Reforms to the rescue?
Auto-enrolment has brought many people into pension savings and from this point of view, it’s been a huge success. However, these trends indicate that people aren’t contributing above minimum levels and risk leaving themselves a long way away from living the life they hope for in retirement.
The government’s been under pressure to announce a timetable for the introduction of important reforms – reducing the minimum age from 22 to 18 and allowing contributions from the first pound of income.
These reforms would undoubtedly boost saving. But given the current financial challenges people are facing, we support their introduction once the effects of the current crisis have ended.
Incentivising people to boost contributions as and when they can afford it could prove popular.
For example, encouraging employers to offer a higher matching contribution for those who contribute more. This would mean people contribute more as they can afford it, while employers would target their spend on those who value it most. It could prove a powerful way of taking pension saving to the next level and boost people’s retirement resilience.
Help calculating your retirement income
To help you understand if your pension is on track to give you the retirement income you want, our pension 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 usually take it out again until you’re at least 55 (57 from 2028).
Do remember to take stock of how much you’ve saved not only in your personal or workplace pensions but also consider any other cash or investments you have. You should be able to access your most recent statements online, or by contacting your bank and pension or investment providers.

Helen raises awareness of key retirement issues to help people build their resilience as they move towards their later life.