State pensioners living alone have been warned they need to find an extra £500 per year as the net income required for a minimum standard of living has increased from £13,400 to £13,900, according to personal finance experts.
What the Minimum Standard Includes
The ‘minimum’ standard of living assumes spending £55 on groceries per week, having no car, and affording one week-long UK holiday annually, among other basic needs. The increase reflects higher costs for food, household bills, transport, social activities, and hobbies, as reported by Pensions UK.
Pension Savings Gap
Pensions UK highlighted that a single person with a full state pension would still need at least £335,000 in a money purchase (defined contribution) pension to achieve a net annual income of £31,700 from an annuity, enabling a moderate lifestyle. This moderate standard includes spending £56 weekly on groceries, running a small car replaced every seven years, and taking a three-star, two-week foreign holiday plus one long UK weekend break per year.
Couples Also Affected
A couple requires an annual net income of £22,500 for a minimum lifestyle, a 4.2% increase from 2025's £21,600. Pensions UK research suggests most of the UK's working population will fall short of saving enough for even a moderate retirement.
Expert Advice
Claire Trott, Head of Advice at St. James’s Place, commented: “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. This helps savers check their progress and amend their plans accordingly. 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.”
