The Pensions and Lifetime Savings Association (PLSA) has warned that the cost of retirement has risen substantially – seeing an increase in the cost of 4.9% since 2019.
The latest PLSA report predicts an extra £40,000 is needed to fund a comfortable 20-year retirement. They break down their calculations into three tiers – minimum, moderate, and comfortable. At the top end, for a comfortable retirement, single people’s annual budget has increased by £600 to £33,600 per annum, while a couple’s budget rose by £2,000 to £49,700, roughly 4.9% more than in 2019.
The ‘comfortable’ tier includes luxuries such as routine beauty treatments, theatre trips, and three weeks of European holidays each year. A large proportion of the increase relates to rising transport costs, which have risen by over 10% since 2019.
Nigel Peaple, the PLSA’s Director of Policy and Advocacy commented:
“It is important that the retirement living standards remain relevant by reflecting real-world price changes and real-world expectations about lifestyles in retirement. We hope the updated standards will encourage people to think about whether they are saving enough for the retirement lifestyle they want and, in particular, whether they are making the most of the employer contributions on offer in their workplace pension.”
“The lockdowns caused by the pandemic have given many workers a foretaste of being retired and made people think about the activities and experiences they truly value. The pandemic has emphasised the importance of economic security as well as social and cultural participation in retirement.”
If you would like to see how comfortable your retirement is going to be, then please contact us, and one of our Wealth Strategists will be able to work with you to draw up your own personal retirement cashflow forecast.
