How Much Do I Need to Retire Comfortably in the UK?

When it comes to planning for retirement, one of the most common questions we hear is, “How much do I actually need?” It’s a simple question with a complex answer — because everyone’s version of a comfortable retirement looks a little different. However, national studies from organisations such as the Pensions and Lifetime Savings Association (PLSA) and Which? give us a useful guide to what different lifestyles might cost in retirement, helping you get a sense of your personal target.

Understanding the Cost of Retirement

According to the PLSA’s Retirement Living Standards (updated in 2024), the average annual spending needed for retirement can be grouped into three lifestyle categories: minimum, moderate, and comfortable. These are based on the cost of essentials like food, utilities and transport, as well as optional extras such as holidays and leisure activities.

• Minimum lifestyle – Around £14,400 a year for a single person, or £22,400 for a couple.
  This covers all the basics — food, housing costs, utilities, and a small amount for socialising — but leaves limited room for extras.

• Moderate lifestyle – Around £31,300 a year for a single person, or £43,100 for a couple.
  This level allows for more flexibility, such as a yearly European holiday, regular meals out, and the ability to replace a car every ten years.

• Comfortable lifestyle – Around £43,100 a year for a single person, or £59,000 for a couple.
  This supports a more luxurious standard of living, with long-haul holidays, frequent leisure activities, and greater financial security.

These figures assume that retirees are mortgage-free and that their household bills are broadly in line with UK averages. Of course, if you still have rent or mortgage payments, or live in a higher-cost area, you may need to budget more.

The Impact of Inflation and Longevity

One of the biggest challenges in retirement planning is that costs don’t stand still. Inflation gradually reduces the purchasing power of your money — meaning that £30,000 a year today may not go nearly as far in 20 years’ time.

Equally important is life expectancy. Many people now spend 25–30 years in retirement, so your income needs to last. Planning for a longer retirement — and building in a safety buffer — can make all the difference between financial security and running short later in life.

A professional financial planner can help you project the long-term impact of inflation and rising living costs on your retirement income, ensuring your money works for you throughout your lifetime.

Where Will Your Retirement Income Come From?

Most people fund their retirement from a mix of sources, including:

• The State Pension – Currently £11,502 per year (2024/25 full new State Pension). This provides a foundation but usually won’t be enough on its own.

• Workplace or private pensions – The cornerstone of most people’s retirement income. Contributions benefit from tax relief and employer top-ups, helping your savings grow efficiently over time.

• ISAs and investments – These offer flexibility, allowing you to draw from tax-efficient savings and investment accounts to supplement your pension income.

• Property or other assets – Some retirees may also use rental income, downsizing proceeds, or other investments to support their lifestyle.

Diversifying your retirement income sources helps spread risk and provides flexibility in how and when you access your money.

Planning Your Path to a Comfortable Retirement

Ultimately, how much you’ll need depends on the lifestyle you want, your health, where you live, and the financial commitments you expect to have. A clear plan — regularly reviewed and adjusted — can ensure you’re on track.

At Westfield Financial Solutions, we help clients calculate their personalised retirement goals, model different income scenarios, and make the most of pensions, ISAs, and investments to achieve a sustainable and enjoyable retirement.

If you’d like to understand what your retirement number looks like and how to get there, speak with one of our advisers today.

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