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How to tell if you’ve saved enough money for retirement

retirement  Couple calculating bills at home using laptop and calculator. Young couple working on computer while calculating finances sitting on couch. Young  man with  wife at home analyzing their finance with documents.
Having a good idea of what you want your retirement to look like will help you put together a plan for how much it is likely to cost. (valentinrussanov via Getty Images)

The question of how much you need to save for a decent retirement is a tricky one. Everyone has their own opinion about what they want their later years to look like. For some it will be time spent travelling overseas, for others it could be spending more time with loved ones and on their hobbies. How much you need to save will also be affected by whether you are single or married with the shared costs of coupledom making a huge difference.

In recent years the Pensions and Lifetime Savings Association (PLSA) has attempted to put some figures in place with the development of their Retirement Income Standards. These aim to estimate the costs of a minimum, moderate and comfortable income.

This year’s figures caused a stir when they were released as they showed the cost of a moderate retirement income has grown by an astonishing £8,000 per year for a single person.


A moderate retirement is defined by factors such as being able to afford one overseas holiday per year with space in the budget to run a car and go out to eat. Just last year the PLSA said this lifestyle would cost £23,300 per year for a single person and £34,000 for a couple. It has since leapt to £34,000 and £43,100, respectively.

Read more: Why you shouldn’t rely on a partner’s pension

For those wanting a bit more luxury the costs have also increased to £43,100 for one person and to £59,000 for a two-person household for a "comfortable" income in retirement.

There are several reasons for this jump — increased food and energy costs are a big factor, but they also reflect people’s changing needs in retirement.

The pandemic period took us away from our family and friends, and the PLSA’s research shows this experience means time with loved ones and enjoying holidays have become an increasingly important part of what we think a good retirement should look like.

It’s worth emphasising that these are not prescriptive numbers — everyone’s view of what makes for a good retirement is different, and so your income needs may differ from these figures.

Read more: Tackling the myths holding back your pension planning

It’s also important to factor the state pension into your plans. With a full new state pension due to go up to around £11,500 per year this will make a sizeable dent in how much you need to save in your own pension. This is particularly the case if you are in a couple and you both get the full amount.

There are many who say they can survive comfortably on far less than these figures suggest but then there are others — for instance those who continue to rent in retirement who may need to save substantially more.

It all shows the great importance of planning ahead for your own circumstances. Having a good idea of what you want your retirement to look like will help you put together a plan for how much it is likely to cost. Checking your progress against this plan on a regular basis will let you know you are on track and give you the time to take action if needed so you get the retirement you have planned for.

Read more: When should I start paying into a pension?

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