PLSA urges pensions industry to adopt new Retirement Living Standards

New Retirement Living Standards designed to help people picture the lifestyle they want when they retire – and understand the cost – were launched today (17 October) by the Pensions and Lifetime Savings Association (PLSA).

Research shows 51% of people focus on their current needs and wants at the expense of providing for the future and only 23% of people are confident they know how much they need to save. 1 The Standards aim to help savers overcome this challenge and give them more confidence about their retirement saving.

Matt Padley and Claire Shepherd from the Centre for Research in Social Policy (CRSP) at Loughborough University conducted independent research with the UK public based on the well-respected Minimum Income Standard developed by the CRSP for the Joseph Rowntree Foundation. The new Retirement Living Standards describe three different standards of living with a basket of goods and associated costs for each – all established by what the public considers realistic and relevant expectations. The basket of goods is made up of household bills, food and drink, transport, holidays and leisure, clothing and personal and helping others.

Pitched at three levels: minimum, moderate and comfortable, the Standards have been designed to fill the gaps in current approaches and act as a practical and meaningful starting point on a saver’s engagement journey.

Like the 5-a-day healthy eating initiative, the PLSA’s ambition is for the Retirement Living Standards to become a widely adopted industry standard. For example, some schemes will use them in general information for their members, in annual benefit statements, or to develop personalised targets for their members’ pension planning. The PLSA wants to see schemes representing 90% of active savers adopt the standards by 2025.

As well as helping savers understand what their retirement will look like, the PLSA believes the Standards will help the pensions industry by:

  • Bringing a set of robust standards, based on independent research with the UK public, for use across scheme communications and tools.

  • Equipping schemes to further encourage savers to engage with their pension.

  • Giving savers concrete information about costs in retirement to give them more confidence in planning to achieve their aspirations.

The PLSA will seek to ensure the pensions sector and the Government adopt the Retirement Living Standards to help many more people plan effectively for retirement. The PLSA is working with the Money and Pensions Service to include Retirement Living Standards in their tools, such as the Money Advice Service pension calculator.


At a cost of £10,200 per year for a single person and £15,700 for a couple, the minimum living standard covers all your needs plus enough for some fun - including social participation and social occasions. For example, you could holiday in the UK, eat out about once a month and do some affordable leisure activities about twice a week. The good news is that through a combination of the full state pension of £9,339 per year, and auto-enrolment in a workplace pension, this level should be very achievable for most people.2

The moderate lifestyle (£20,200 a year for singles and £29,100 for couples) provides, in addition to the minimum lifestyle, more financial security and more flexibility. For example, you could have a two-week holiday in Europe and eat out a few times a month. Savers would have the opportunity to do more of the things they want to do.

At the comfortable level (£33,000 a year for singles and £47,500 for couples), retirees could enjoy some luxuries like regular beauty treatments, theatre trips and three weeks in Europe a year.

Roughly speaking, a single person will need about £10k a year to achieve the minimum living standard, £20k a year for moderate, and £30k a year for comfortable. Like 5-a-day, this can be briefly summarised as 10k-20k-30k. For couples, it's 15k-30k-45k.

The standards cover a range of goods and services that are relevant for the majority of people. Currently most people when they reach retirement do not have mortgage, rent or social care costs. These and other costs such as tax on pension income may need to be added depending on individuals’ circumstances.

Nigel Peaple, Director of Policy and Research, PLSA, said: “The Retirement Living Standards will support better saver engagement. They distil robust, in-depth research with the public into an easy to understand basket of goods that helps people picture the future - and relatable figures that can provide a powerful and practical tool for encouraging engagement with saving.

“A recent PLSA survey showed 76% of people with a workplace pension agree that Retirement Living Standards would help them know if they were on track for the lifestyle they want in retirement.3

“The PLSA looks forward to working closely with the pensions industry to ensure widespread adoption of the Retirement Living Standards to transform the way people think about saving for spending in later life.”

Guy Opperman, Minister for Pensions and Financial Inclusion, said: “We have transformed saving for retirement for millions of people and the next challenge is to make it easier for them to engage more with their pensions. It’s great to see what the PLSA has developed which has the potential to help savers think about the future and plan for the retirement they want.”

Jackie Spencer, Senior Policy and Propositions Manager, Money and Pensions Service, said: “Saving for something is easier to do when you can visualise what you’re working towards, which is why people are often more motivated to save for short-term goals like holidays and new cars than they are for their retirement.

“The new Retirement Living Standards are a great way of offering savers some practical examples of what they can expect from their lives when they stop working. The Money and Pensions Service has agreed to be an early adopter of the new standards and will be looking to incorporate them into pension guidance and our online pension calculator.”

  1. NB: These figures are based on research findings and do not constitute financial advice.

    PLSA’s Hitting the Target report (2018), p. 24

  2. The Standards are based on the cost of goods and services outside of London. If you live in London, you will need a little extra because of the higher cost of living. For the minimum, you will need £2,000 to £4,000 extra depending on whether you are single or cohabiting. For moderate it’s £4,000 extra for both singles and those cohabiting, and for comfortable, its £3,000 for singles and £2,000 for those co-habiting.

  3. The PLSA commissioned Populus to undertake an omnibus poll of approximately 2,096 individuals aged 18 to State Pension Age (SPA) in the UK. The poll was conducted between 28 and 29 August 2019. Data has been weighted to be representative of the UK population.

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