Publication

Helping members achieve their retirement goals

19 February 2024

5 min

Author

Darren Baillie

Head of Digital Strategy (DC Pensions)

How much money will you need when you retire? And what standard of living will that give you?

In 2019, the Pensions and Lifetime Savings Association (“PLSA”) launched their Retirement Living Standards (RLS) to help members answer those questions.

The RLS are the levels of expenditure required to achieve Minimum, Moderate and Comfortable standards of living in retirement.

On the 7 February 2024, the PLSA updated its RLS to reflect changes in the cost of living, including high food inflation and rising energy costs. Unsurprisingly, this has led to significant increases in the Standards, particularly to the Moderate RLS, and members will now have to contribute more or work longer (or both) to achieve the same standard of living as before.

The standards are derived using a ‘basket of goods’ approach, which means they can be described in terms of the goods and services members will spend their money on when they retire.

The PLSA hope that, “by giving savers a general figure that they can understand,…they can start to develop their own personal targets based on individual circumstances and aspirations.”

How much will I need?

If you’re single, then:

For a Minimum standard of living, you’ll now need £14,400 pa. This represents a 13% increase from the previous level.
For a Moderate standard of living, which gives you more financial security and flexibility than the minimum, you’ll need £31,300 pa. This is 34% higher than the previous level.
For a Comfortable standard of living, which gives you more financial freedom and money for some luxuries, you’ll need £43,100 pa. This represents an 16% increase.

The PLSA also produces standards for couples, which are less than twice the standards for singles. Members who are part of a couple can achieve a higher standard of living for the same level of contributions as their single counterparts.

We’ve analysed how different combinations of contribution rate and salary impact the chance of achieving the new RLS for an early career member today. Download our publication to find out more.

If you have any questions, please get in touch.