A question we are often asked by clients is whether their pension income is going to be sufficient to meet the family’s future living expenses. This has been especially important in recent years as living costs continue to rise.
The team here at RPGCC Financial Services want to ensure you stay informed about crucial developments that could impact upon your retirement planning.
A recent report from the Pensions and Lifetime Savings Association (PLSA) shed some light on the ever increasing financial requirements for retirees, particularly in light of the rising cost of living, raising family costs and the evolving post-pandemic landscape.
According to the PLSA, the cost of living has surged, necessitating a higher retirement income than that previously estimated.
A single person now requires £31,300 annually for a moderate retirement income, up £8,000 from previous estimates. This rise is attributed to factors like escalating food and energy costs alongside a growing expectation to provide financial support to grandchildren.
These figures, developed by the Centre for Research in Social Policy at Loughborough University, outlined various retirement standards ranking them as minimum, moderate, and comfortable in order to guide your retirement savings strategy effectively.
Minimum Standard: £14,400 annually for a single person, £22,400 for couples
Moderate Standard: £31,300 annually for a single person, £43,100 for couples
Comfortable Standard: £43,100 annually for a single person, £59,000 for couples
It’s essential that we consider these estimates when planning retirement income and savings goals. For instance, someone purchasing an annuity would need to save between £40,000 (for a minimum standard) and £790,000 (for a comfortable standard), depending on their desired retirement standard.
The report by the PLSA serves as a wake-up call to many and underlines the significance of proactive retirement planning.
Whilst the state pension triple-lock and automatic pension enrollment offers some level of safeguard, it’s crucial that everyone takes an active role in securing their own, and their family’s financial future.
If you have any questions or would like to speak to RPGCC Financial Services about retirement planning or any other area of personal investments please contact us on 020 7870 9050 or email Matt King directly on mking@rpgcc.co.uk.
