How far will your pension go as retirement costs go up
This includes the state pension, but shows how much heavy lifting our workplace or personal pensions need to do to fill the gap.
This is hardly going to buy you a luxury lifestyle either – a moderate lifestyle covers all your basics, plus some nice extras such as two weeks in Europe a year and the ability to run a car.
If you want something more luxurious, this data shows your pension is going to need to work much harder: a comfortable lifestyle is said to cost £43,900 per year for a single person and £60,600 for a couple.
Read more: What is the Pension Investment Review?
Before you throw your hands up in despair, it's fair to say that while these figures provide a useful rule of thumb, they aren't hard and fast.
Our own data from the HL Savings and Resilience Barometer put the costs slightly lower. A moderate retirement for a single person was pegged at £26,129 per year and a comfortable retirement at £41,829.
The key thing is to think about what retirement means for you – is it lots of travelling or something more sedate? You may find that what you need differs massively from these figures.
Once you've got an idea of what you want, you can start to put a figure on what that might cost. It's important to factor in all costs. The PLSA data assumes you own your home in retirement, and this is no longer the case for many people. So, if this is you, you will also need to factor mortgage or rental costs into your plan.
You can then use online calculators to see if what you've got in your pension will get you where you need to be. Putting your data in an online calculator can show you what you are on track for in retirement. This will either give you the confidence of knowing you've got enough, or the time to put a plan in place if you haven't.
Read more: Should people keep working until later in life?
They can even be used to model the impact of boosting your contributions over time, so you can see how much small changes can help you move towards your retirement goal.
Boosting contributions every time you get a pay rise can also make a big difference and it's also worth checking to see if your employer is willing to increase their contributions if you increase yours. This is known as an employer match and can play a big part in boosting your pension.
The data shows that coupled up retirees have a slightly easier time of things than their single friends. This is because they share a lot of costs and will have the benefit of two state pensions and two workplace or personal pensions.
This is a big help, but it's important not to rely too heavily on a partner's pension to see you through retirement. Relationships may not last and there's a worry that you could find yourself approaching retirement with very little.
It's always important to make your own provision – even if you stay together having your own income will give you more control over how you spend your money in retirement.
Read more:
How getting ahead on your tax return can help cut your tax bill
Why it's important to plan for retirement with your partner
How to plan for retirement and track your pension pot income
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