According to the latest retirement living standards from Pensions UK, a single person needs to spend £45,400 a year to enjoy a comfortable retirement. The figures, developed by researchers at Loughborough University, exclude housing costs and refer to spending rather than income.
The comfortable standard includes a three-year-old car replaced every five years, up to £1,500 for clothing and footwear annually, and £78 per week for food. However, retirement experts warn that most people are not on track to achieve this level of spending in later life.
The average annual salary in the UK is £39,039, according to the Office for National Statistics, meaning many workers earn less than the amount needed for a comfortable retirement. To achieve a £45,400 spending level, a pensioner would need around £55,000 pre-tax from savings and state pension.
For working-age individuals, the required income is even higher due to income tax, national insurance, and housing costs. With average mortgage payments of about £19,000 a year, a single worker would need a take-home pay of roughly £64,000, equating to a pre-tax income of over £90,000 – placing them in the top 10 per cent of taxpayers.
The figures highlight the disparity between the comfortable retirement lifestyle deemed standard and the financial reality for most workers. Experts call for policies to boost retirement savings, such as tax relief and auto-enrolment, while also improving living standards for those under retirement age.
