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Daily Record
2 days ago
- Business
- Daily Record
Exact amount of retirement money people need for a minimum, moderate or comfortable lifestyle
Workplace pensions could give people a better chance of the kind of lifestyle they want in retirement. The minimum amount of money people need in retirement has dropped, amid lower energy prices and people's changing expectations, according to the latest calculations. The Pensions and Lifetime Savings Association (PLSA) sets three different retirement lifestyles - minimum, moderate, and comfortable - to give people a general indication of the kind of lifestyle they may be on track for in retirement. The cash amounts for each standard are regularly updated by the PLSA. This year, the cost of a minimum retirement living standard for a one-person household has decreased by £1,000 per year to £13,400, while for a two-person household, it is £21,600, down from £22,400 a year previously. The changes are mainly due to a substantial reduction in energy costs and some small spending adjustments made to the living standard by research participants, the PLSA said. The minimum standard covers people's basic costs, with some money left over for other expenses including holidays, clothing, cars, dining out. Research discussion groups for the minimum standard reported some small changes in what they need for a minimum standard of living, clothing, hairdressing, technology purchases, taxi use, and charitable giving, although participants agreed that the budget for rail travel would need to rise, the PLSA said. The report said the amounts needed for moderate and comfortable standards have increased slightly, reflecting the impact of inflation across many spending categories being offset by decreases in energy costs. Moderate lifestyle in retirement For a moderate lifestyle, a single person would need £31,700, up by £400 from £31,300 previously, while two people would need £43,900, up by £800 from £43,100 previously. Comfortable lifestyle in retirement For a comfortable retirement, a single person would need £43,900, up by £800 from £43,100 previously, and a two-person household would need £60,600 - a £1,600 annual increase from £59,000. The retirement living standard amounts for 2024/25 were calculated by the Centre for Research in Social Policy at Loughborough University on behalf of the PLSA. Across all retirement living standards, weekly domestic fuel budgets had fallen significantly since the previous 2023/2024 update. The standards are a guide to the costs of living in retirement and not fixed savings targets. Zoe Alexander, director of policy and advocacy at the PLSA, said: 'For many, retirement is about maintaining the life they already have, not living more extravagantly or cutting back to the bare essentials. 'The standards are designed to help people picture that future and plan in a way that works for them.' She said that for many people, saving more than the minimum contributions required in their workplace pension could help to give them a better chance of the kind of retirement they want. The PLSA said the role of the State Pension also remains vital, particularly for those at the minimum level. With many people carrying mortgages into later life, the research also underlined the tension between paying off a mortgage and retirement for some households. More than half (58%) of people said they expect to be mortgage-free homeowners by the time they retire, but 17 per cent expect to be homeowners with a mortgage or loan and 8% expect to be renting from a private landlord. Meanwhile, 7 per cent expect to be renting from the council and 8 per cent anticipate that they will be renting from a housing association. And 1 per cent expect to be living 'rent free' in retirement - meaning they anticipate they will be living in someone else's home and not paying formal rent. Professor Matt Padley, co-director of the Centre for Research in Social Policy at Loughborough University, said: 'The consequences of the cost of living challenges over the past few years are still being felt, and we've seen some subtle changes in public consensus about minimum living standards in retirement, resulting in a small fall in the expenditure needed to reach this standard. 'In these uncertain times, planning in concrete ways for the future is ever more important, and the RLS (retirement living standards) help people to think in more concrete ways about what they want their retirement to look like, and how much they will need to live at this level.' PLSA breakdown of people who expect to own their home outright when they retire, without a mortgage: Scotland - 61% Wales - 56% Northern Ireland - 68% North East - 58% North West - 60% Yorkshire and the Humber - 54% West Midlands - 61% East Midlands - 58% Eastern England - 66% London - 53% South East - 56% South West - 56% More than 1,500 people were surveyed across the UK by Yonder in May for the consumer research.
STV News
3 days ago
- Politics
- STV News
'One in four children in poverty' across a third of Scotland's Westminster seats
At least one in four children are living in poverty after housing costs across a third of Scotland's Westminster constituencies, new figures show. Analysis from Loughborough University reveals that two-thirds of MPs across the UK represent areas where child poverty affects at least one in four children. While devolved policies in Scotland, such as the Scottish Child Payment, have helped reduce overall poverty levels, a third of Scottish MPs still serve constituencies where more than 25% of children live in poverty. Constituencies with the highest child poverty rates in the UK include Birmingham Ladywood, Bradford West and Leeds South. In Scotland, the highest rates were found in Glasgow East, Glasgow South West and Glasgow North East. The annual analysis by the Centre for Research in Social Policy at Loughborough University looks at local poverty rates after housing costs, which is seen as a more accurate assessment of disposable family income. The UK Government already release data that shows local poverty levels before housing costs are calculated. The report also finds that there is a an 'extremely high correlation' between the two-child limit to Universal Credit policy and the proportion of children in poverty in each constituency. Dan Paskins, vice-chair of the UK wide End Child Poverty Coalition, said: 'Each year this data presents a bleak picture of life for the UK's children. 'A record number are now in poverty and it's under the noses of our MPs, particularly Cabinet members: 80% of Keir Starmer's Cabinet represent constituencies with higher than average child poverty rates. 'The time for action is now, and the Comprehensive Spending Review, and forthcoming child poverty strategy should involve bold action. 'Due to the analysis' finding a strong correlation between child poverty rates in local areas and the number of children impacted by the two-child limit to Universal Credit, it is essential this policy is scrapped as soon as possible.' Speaking on behalf of Scottish members of the End Child Poverty coalition, John Dickie said: 'Child poverty is lower in Scotland and Holyrood policies are driving real progress, but these statistics are a stark reminder that across the country far too many children are still being left behind. 'Children are living in hardship in every part of Scotland and in some constituencies one in three children are still locked in poverty. 'We need to see the UK government step up to the plate with a child poverty strategy that abolishes the two-child limit as an essential starting point. 'Here in Scotland all the political parties need to commit to investing more in the Scottish child payment, childcare, housing and parental employment if Scotland is to meet the statutory child poverty targets that they all backed.' Across the UK, 31% of children in the UK are living in relative poverty, which equates to 4.5 million children. Overall, 42% of constituencies have a higher-than-average poverty rate. That includes the Prime Minister, Keir Starmer's constituency Holborn and St Pancras with a child poverty rate at 47%. Other Cabinet members, Secretary of State for Justice, Shabana Mahmood, Northern Ireland Secretary, Hilary Benn, Foreign Secretary David Lammy, and Pat McFadden, Lord Chancellor, all have child poverty rates of over 40%. The UK Government has promised to deliver a Child Poverty Strategy and drive down child poverty across the UK. A UK Government spokesperson said: 'No child should be in poverty – that's why our Ministerial Taskforce is exploring all levers available across government to give children across the United Kingdom the best start in life. 'As we fix the foundations of the economy to make everyone better off, our Get Britain Working plan and the landmark Employment Rights Bill will help people find and maintain better paid and more secure jobs with stronger rights. We have increased the National Living Wage and are capping how much Universal Credit can be taken for debt repayments to put more money in people's pockets and help families build a brighter future. 'Both of Scotland's governments must work together to help more people into work, while always supporting those who cannot.' Social Justice Secretary Shirley-Anne Somerville said: 'I welcome this report from the End Child Poverty Coalition. We are absolutely committed to meeting the 2030 child poverty targets and thanks to the actions we are already taking, families in the poorest 10% of households are estimated to be £2,600 a year better off in 2025-26 and this value is projected to grow to an average of £3,700 a year by 2029-30. 'However our policies are having to work harder in the current economic context and as a result of decisions taken by the UK Government, such as keeping the two-child limit on Universal Credit which are holding back Scotland's progress. 'While the Joseph Rowntree Foundation predict child poverty will rise in other parts of the UK by 2029, they highlight that policies such as our Scottish Child Payment, and our commitment to mitigate the two-child limit, are behind Scotland 'bucking the trend'. 'We will publish our third child poverty delivery plan by the end of March 2026, setting out the actions to be taken between 2026-2031 to meet the 2030 targets. We will continue working closely with stakeholders, including the Joseph Rowntree Foundation, to shape that plan.' Get all the latest news from around the country Follow STV News Scan the QR code on your mobile device for all the latest news from around the country
