How Much Do You Really Need for Retirement? The Retirement Living Standards Explained
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only. You should always seek professional advice from an appropriately qualified adviser.
All contents are based on our understanding of current legislation, which is subject to change, any information provided here is only correct at the time of posting.
Thinking about how much you might need in retirement? It can feel abstract, but the Retirement Living Standards offer clarity, with numbers you can picture. Created through independent research by Loughborough University for the Pensions and Lifetime Savings Association, the RLS define retirement lifestyles at three levels: Minimum, Moderate, and Comfortable. Each is based on a “basket” of goods and services, everything from food and bills to transport, leisure and even charitable giving. The figures assume you own your home outright and don’t factor in costs like rent, mortgage payments, or social care, which you’d need to add if they apply.
How Are the Standards Calculated, and Kept Relevant?
What makes the RLS meaningful isn’t guesswork, it’s grounded in public consensus. Focus groups with real savers discuss what they believe constitutes each standard of living. These discussions shape the costed baskets, unlike expert-driven approaches, this is a “bottom-up” method rooted in real-life expectations.
Once the baskets are agreed, researchers assign costs using official price indices, such as the Consumer Prices Index (CPI), and update them regularly. Inflation-driven uprating helps ensure they stay accurate. For example, between 2023 and 2024, the Minimum standard actually dropped slightly (thanks to falling domestic fuel prices), while Moderate and Comfortable levels increased modestly, well below CPI overall
A Few Eye-Opening Numbers
Let’s bring them to life with some recent figures from their recent update earlier this year:
Minimum (single): £13,400 per year
Moderate (single): £31,700 per year
Comfortable (single): £43,900 per year
For couples, these rise to approximately £21,600; £43,900; and £60,600 respectively
For many people, their state pension currently £11,973 for 2025/26 and private pensions will need to be able to achieve the minimum level costs. Unfortunately, where applicable income tax needs to be considered also as the above are the net figures (i.e how much you need after tax).
Why the RLS Matter to You
For many people, the biggest barrier to planning for retirement is simply not knowing what to aim for, 82% of savers don’t know how much they’ll need. The RLS provide clear, realistic benchmarks based on what others in the UK consider acceptable or desirable.
Rather than asking “How much should I save?”, you can ask, “Which lifestyle feels right and how much will that cost each year?” Then compare that to your existing savings, pension projections and State Pension forecast. It’s a powerful way to make planning feel tangible, rather than vague.
A Word of Caution and Encouragement
That said, the RLS are estimates, not personal advice. They assume certain circumstances (e.g., owning your home) and don’t account for personal goals, maybe you’d rather travel more, downsize, support grandchildren, or manage care costs. For that, nothing replaces tailored financial advice.
You can absolutely use the RLS as a first step to visualise your retirement path, but for a plan that fits your lifestyle, ambitions, and finances, it’s essential to go deeper. That’s where structured financial planning comes in.
Final Thoughts
The Retirement Living Standards are an excellent starting point. honest, research-backed benchmarks rooted in public expectations. They help you see what different retirement lifestyles might realistically cost. But achieving those goals depends on your unique situation - your savings, timing, spending priorities, and State Pension outlook.
So, start with the RLS for clarity, then get in touch to explore a personal plan that ensures your retirement is not just planned, but personally designed. Let’s make your money work for the life you want.
For more information on the Retirement Living Standards, see the attached link. https://www.retirementlivingstandards.org.uk