The Retirement Living Standards report has revealed that in order to enjoy a ‘comfortable’ retirement couples may need to save up to £1 million.
Prepared by the Pensions and Lifetime Savings Association, the report found that for people to enjoy a consistently high standard of life, that would match expectations during a person’s working life that it could cost couples up to £45,000 a year on top of a full state pension.
For singletons, that figure is nearer £30,000, but it means that a couple would need a combined pension pot of £1 million if they do not receive the full state pension or £710,000 if they do.
They consider a comfortable life to be a weekly food budget of around £56, sufficient income to replace a car every five years, money to cover beauty treatments and three overseas holidays each year.
Those living comfortably by the Association’s standards would also be able to spend up to £1,500 a year on clothes and going out.
For those with a more moderate lifestyle, which would include the cost of owning and running a car that is replaced every 10 years and affording at least one overseas holiday a year, they predict they will need an income of £20,200 a year for singletons and £29,100 for couples. This means that couples will still need to save upwards of £500,000.
Nigel Peaple from the Pensions and Lifetime Savings Association, said: “Goal setting can help people plan and a series of simple standards could transform pensions engagement.”