Director of Policy and Advocacy, Pensions and Lifetime Savings Association (PLSA)
The Government’s commitment to the state pension triple lock is especially important as the cost of living crisis hits retirees.
Retirees trying to achieve a basic standard of living will have seen their expenditure increase by almost 20% due to high inflation. Based on independent research, the Pensions and Lifetime Savings Association’s Retirement Living Standards describe the cost of goods and services for retirement living at three levels.
Essentials for retirees
The Retirement Living Standards are regularly reviewed to ensure they keep up with changes in the public’s expectations of what retired households need as well as the changes to prices on the shelves to remain relevant to real-world retirement spending.
The cost of a minimum lifestyle, which includes all the essentials with a little bit left over for some fun, has increased from £10,900 to £12,800 — or 18% — for a single person and from £16,700 to £19,900 — or 19% — for a couple. That includes £96 for a couple’s weekly food shop, a week’s holiday in the UK, eating out about once a month and some affordable leisure activities about twice a week. It does not include the budget to run a car.
The moderate level is up 12% to £23,300 for a single retiree and 11% to £34,000 for a couple.
Flexibility for retirees
The moderate level is up 12% to £23,300 for a single retiree and 11% to £34,000 for a couple. This level provides more financial security and more flexibility. For example, a couple could spend £127 on the weekly food shop, have a two-week holiday in Europe and eat out a few times a month.
At the luxurious ‘Comfortable Retirement Living Standard,’ retirees can expect regular beauty treatments, theatre trips and three weeks’ holiday in Europe a year. A couple could spend £238 per week on food shopping. At this level, the cost of living increased by 11% to £37,300 for one person and 10% to £54,500 for a two-person household.
Requirements to survive
The disproportionate increase in the cost of retirement for those on the ‘Minimum Retirement Living Standard’ means the Government’s commitment to the state pension triple lock is especially important.
Rising by a record 10.1% to £10,600 this year, a couple who are each in receipt of a full new state pension would reach the Minimum Retirement Living Standard. Those aiming for more in retirement would need to supplement this amount with income from a pension or other savings.