The amount needed for a single state pensioner to achieve a minimum standard of living in retirement has risen by £500 over the past year, according to new analysis by Pensions UK. The net income required has increased from £13,400 to £13,900, a 3.7 per cent rise, which is not covered by the full state pension.
What the Minimum Lifestyle Includes
The minimum standard of living assumes spending £55 per week on groceries, no car, and one week-long UK holiday per year, among other basic needs. The increase reflects higher costs for food, essential household bills, transport, social activities, and hobbies.
Moderate Retirement Requires More Savings
For a moderate lifestyle, a single person with a full state pension would still need at least £335,000 in a defined contribution pension to achieve a net annual income of £31,700. This lifestyle includes £56 per week on groceries, a small car replaced every seven years, a two-week foreign holiday, and one long weekend break in the UK annually.
Couples need an annual net income of £22,500 for a minimum lifestyle, up 4.2 per cent from £21,600 in 2025.
Concerns Over Savings Shortfalls
Pensions UK warns that most of the UK's working population will fall short of the savings needed for even a moderate retirement. Claire Trott, Head of Advice at St. James’s Place, said: “The increases across the board of the UK Retirement Living Standards isn't a surprise because of the ongoing cost of living increases. It does remind us that retirement planning isn't a ‘once and done’ thing and needs an annual review at a minimum.”
Trott added: “Having a financial plan can really help. Seven out of 10 people from our 2026 Financial Health Report said that a plan made them feel more confident in their financial position.”
