Pensioners have been warned they may need to set aside additional funds after Loughborough University announced updated retirement living standards. Which? Money has found that a 'comfortable' retirement for a couple now costs £62,700 per year, an increase of £2,100 from £60,600 last year.
Rising Costs Across All Retirement Standards
A comfortable retirement for a single person now costs £45,400 annually, while even a basic 'minimum' standard of living has risen to £13,900. These figures, based on the latest retirement living standards from Pensions UK, underscore growing concerns that millions of people are not saving enough for their later years.
Expert Warnings on Inflation and Savings
Holly Lanyon, a money expert at Which?, emphasised that rising costs highlight the importance for savers to understand the true expense of retirement. Professor Matt Padley, co-director of the Centre for Research in Social Policy at Loughborough University, noted: 'We know many people are not saving enough for retirement, but for some it is simply impossible to save more. The retirement living standards provide a benchmark to help us consider the roles of the state, employers, and individuals in ensuring everyone can achieve at least a minimum standard of living.'
Gary Smith, senior client partner and retirement specialist at wealth management firm Evelyn Partners, warned that costs will be significantly higher for those further from retirement. 'The incomes are based on current living costs, so younger and middle-aged savers must adjust for inflation. If someone needs a post-tax income of £45,400 for a comfortable lifestyle today, they will need much more in 20 years. With inflation averaging 2.5% over two decades, that would be roughly £74,800 by 2046.'
Advice for Future Retirees
Holly Lanyon added: 'To enjoy a more comfortable retirement, you will need to supplement your state pension with income from a private pension. The earlier you start contributing, the better, as your savings will have longer to benefit from investment growth.'
