The Pensions and Lifetime Savings Associations (PLSA) has updated its Retirement Living Standards to include more money for eating out, a higher personal grooming budget and the inclusion of a Netflix subscription.
Pitched at three different levels – minimum, moderate and comfortable – the Retirement Living Standards are designed to help people picture the lifestyle they want when they retire and understand the cost.
The different standards comprise household bills, food and drink, transport, holidays and leisure, clothing and social and cultural participation.
In its first update since 2019, the PLSA said individuals looking to achieve the Minimum Retirement Living Standard will need £10,900 a year – an increase of £700 on the 2019 budget. Couples will need a budget of £16,700 a year.
The figures continue to include a week’s holiday in the UK, eating out once a month and some affordable leisure activities twice a week, but have been updated to include an increase in the budget for hairdressing and the inclusion of Netflix.
Meanwhile, the Moderate Retirement Living Standard has risen by £600 to £20,800 for a single person and by £1,500 to £30,600 for a couple. The PLSA said the cost of eating out, which rose from £75 per person per month in 2019 to £100 per person per month in 2021 drove much of the increase.
According to PLSA, around half of single employees are on track to expect a lifestyle between minimum and moderate and people in a couple who are able to share costs will be higher in this range.
At the higher end of the range, individuals targeting a Comfortable Retirement Living Standard will need an income of £33, 600 a year, up £600 on 2019, while couples will require a budget of £49,700.
Around one in six single employees are projected to have an income between moderate and comfortable.
The PLSA said the pandemic had reinforced the importance of having choices and opportunities as well as economic security and had prompted people to think about how prepared they are for retirement, with the Retirement Living Standards offering a good starting point.
Nigel Peaple, director of policy and advocacy at the PLSA said: “It is important that the Retirement Living Standards remain relevant by reflecting real world price changes and real world expectations about lifestyles in retirement. We hope the updated standards will encourage people to think about whether they are saving enough for the retirement lifestyle they want and, in particular, whether they are making the most of the employer contributions on offer in their workplace pension.”
Peaple added: “The lockdowns caused by the pandemic have given many workers a foretaste of being retired and made people think about the activities and experiences they truly value. The pandemic has emphasised the importance of economic security as well as social and cultural participation in retirement. With barbers and hairdressers closed during lockdowns and many of us taking scissors to our own hair for the first time, it is little surprise that the research groups agreed the budget for personal grooming should be increased across the three standards. The addition of Netflix also gives an insight into what many of us expect to be doing when we finish work.”
