New Study into How to Live Comfortable in Retirement

The Pensions and Lifetime Savings Association (PLSA), in collaboration with independent academic researchers from the Loughborough University, has recently released its “Retirement Living Standards” model, “developed to help individuals picture what kind of lifestyle they could have in retirement and the costs involved” .

What does the study class as a comfortable retirement amount?

The sums needed in retirement for each different lifestyle are estimated by the research as follows:

UK Retirement Living Standards

The main assumption going into the calculations is that retirees are mortgage free.

The Minimum lifestyle is expected to cover essential costs and bills as well transport costs but minimal extras and no holidaying abroad.

The Moderate lifestyle covers expenses falling under the Minimum lifestyle plus maybe a foreign holiday a year and some more extras such as eating out etc.

The Comfortable lifestyle includes costs falling under the previous two lifestyles and possibly two foreign holidays a year as well as a more generous budget for extras (dining, hobbies etc.).

Even though the so-called “triple lock”, i.e. the level of state pension increasing every year by average earnings, inflation or 2.5%, whichever is higher, is to stay for the time being, according to the Department for Work and Pensions the number of those who will not be saving enough for retirement has already increased from 12.5 million in 2023 to 14.6 million in 2025.

Considering that from April 2027 the Inheritance Tax regime (IHT) will be applied on unused pension funds and death benefits, and the risks retirees face in drawing income from their pension pots in retirement such as inflation reducing purchasing power, longevity risk, sequencing risk (the risk of investments falling sharply in value in the first years of retirement), to name just a few, the relevance of expert, qualified financial planning has never been more important.

Looking for expert advice to prepare for a comfortable retirement?

At KLO Financial Services, we offer expert retirement planning services, from our team of independent financial advisers to help you plan ahead for a comfortable retirement, you want, answering key questions including what a comfortable retirement amount is?

To speak to one of our personal financial advisers in Birmingham, Warwick and London, call 01926 492406 or email enquiries@klofinancialservices.com

Disclaimer

Any research is for information purposes only and does not constitute financial advice. The value of investments and any income from them may go down as well as up, so you may get back less than you invested.

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