…to maintain your ideal lifestyle through retirement.

First, let’s introduce the PLSA – the Pension and Lifetime Savings Association, who actually try to forecast the answer to that question – just how much is enough?

One of the UK’s major insurance companies (Scottish Widows) runs a annual National Retirement Forecast (NRF) survey designed to capture a snapshot of the UK’s future retirement landscape.

The forecast uses the Pension and Lifetime Savings Association’s (PLSA) ‘Retirement Living Standards’ levels to estimate the lifestyle that people might expect to achieve when they stop working.

Those figures look like this:

Given these criteria, the annual survey seeks to gauge how social, economic and political conditions affect our ability to earn a sufficient income in retirement.

The ‘cost of living crisis’ – a phrase that’s hard to avoid.

High inflation, stealthy tax rises and squeezed earnings growth govern our financial landscape.

In time, the crisis should pass. History is often forgotten, and the future cannot be governed by the past. In July 2021, just over two years ago, inflation was bang on the Bank of England’s target, at 2.0%. Then, the baby and bathwater went south. Whichever way we look at it, it’s a rollercoaster.

So, what does the survey’s report suggest?

It breaks retirement standards into three bands: minimum, moderate and comfortable retirement lifestyles. These are updated each year to take account of price increases and changes in retirement spending patterns. The latest set, published in January 2023, shows that in 2022 the yearly cost of a minimum retirement lifestyle increased from £10,900 to £12,800 (18%) for a single person and from £16,700 to £19,900 (19%) for a couple.

The main conclusion is that over a third of the population are not on target to achieve even the minimum lifestyle standard when they reach retirement.

However, an almost identical proportion are currently set for a comfortable retirement. 

Is this your ‘wake-up call’?

It makes sense to find out which retirement outcome you are on track to achieve, and is it the one you expected or aspired to achieve.

The sooner you know, the more time you have to adjust your plans accordingly.

• Where are you? – in terms of feeling good about life and financial preparations for the future.
• Where would you like to be?  
• How critical is your need to review your financial planning and whether or not you have sufficient provision to live the life to desire (and deserve) when you stop working?

Take a look at the LIFE part of the menu (above).

Here, we pose the question HOW MUCH IS ENOUGH?

Who are you and just how much would you need to earn in retirement to maintain the lifestyle you enjoyed in your working life? Crucially, what you need depends entirely on what your intended lifestyle will cost to deliver.

HOW MUCH IS ENOUGH to balance your health, wealth and wellbeing when your income in retirement depends upon the provisions you have made whilst working?

Everyone is different. Some live to survive, some to achieve and some live to enjoy life. Some happily balance all three.

MONEY LIFE BALANCE (MLB) is a Lifestyle Financial Planning service recognizing that MONEY IS JUST A TOOL. Like all new tools, it’s important to read the instructions before using them. MLB will take you through those instructions and help shape the plan that best suits your life and lifestyle expectations.

Call us on 0207 821 2424 to review your retirement lifestyle.

The value of pensions and investments and the income they produce can fall as well as rise and you may not get back the full amount you invested.

Past performance is not a reliable indicator of future performance.