Latest news with #ZoeAlexander
Daily Mirror
2 days ago
- Business
- Daily Mirror
Couples on State Pension given £1,600 warning over retirement risk
The Pensions and Lifetime Savings Association (PLSA) has put the annual cost of a comfortable retirement for a couple at £60,600 The cost of a comfortable retirement for a couple has rocketed to an astonishing £60,600 a year. This post-tax income number has gone up by £1,600 from the previous year, reveals new research by the Pensions and Lifetime Savings Association (PLSA). For a more modest lifestyle after retirement, couples now face an annual post-tax increase of £800, with costs hitting £43,900. Conversely, those aiming for just the basics in later life will find themselves spending £800 less, as figures drop to £21,600 per annum for couples. In an effort to set clear expectations for retirement spending, the PLSA's Retirement Living Standards (RLS) were formed together with Loughborough University's Centre for Research in Social Policy, based on thorough conversations with Britons about their anticipated retirement lifestyles, reports the Express. Through this study, they've laid out their guidelines for living comfortably after work ends: Comfortable Standard of Living Annual income: £60,600 (couple) Greater financial freedom Includes regular overseas holidays, generous home improvements, and extensive social/leisure activities Moderate Standard of Living Annual income: £43,900 (couple) More financial security and flexibility Includes a car, a few holidays a year, and more frequent leisure activities Minimum Standard of Living Annual income: £21,600 (couple) Covers basic needs with some leftover for occasional treats Includes a week-long UK holiday, dining out once a month No budget for a car; relies on public transport Zoe Alexander, PLSA's Director of Policy and Advocacy, noted: "We're not just seeing changes in costs, we're seeing changes in how retirees live." She added: "Retirement isn't a one-size-fits-all experience. The Standards recognise that retirees can share costs, often with a partner, and that can make a huge difference to affordability in later life." The latest research underscores the critical role of the State Pension, particularly for those on the minimum level. By 2025/26, a couple receiving the full new State Pension, which amounts to £11,973 per person or £23,946 combined, would be able to cover the costs associated with the minimum standard of living. The Pensions and Lifetime Savings Association (PLSA) is urging people to utilise its findings as a guide for future planning, adapting the information to fit personal lifestyles and mixing elements from various living standards. Notably, the data indicates that to achieve a comfortable joint annual income after tax of £60,600, supplementing the State Pension, each partner in a couple would need a private pension pot ranging between £300,000 and £460,000 to purchase an annuity – a lifetime income. For a moderate lifestyle in retirement, it's estimated that each individual would require a private pension savings of £165,000 to £250,000 to secure an annuity that would top up their State Pension. Professor Matt Padley, Co-director of the Centre for Research in Social Policy at Loughborough University, commented: "Our research on what the public agree is needed in retirement at these three different levels continues to track changes in expectations, shaped by the broader economic, social and political context." He also noted: "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." Zoe Alexander stated: "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." Tom Selby, AJ Bell's Director of Public Policy, noted that the required size of private pension pots "might feel intimidating". He advised: "The key is to focus on saving as much as you can afford from as early as possible, taking advantage of incentives like employer contributions, tax relief and tax-free investment growth." At present, the minimum pension contributions are 8% of incomes; however, this falls short of the necessary amount, he warned. "The big danger here is that, without a scaling up of minimum contributions, millions of people will sleepwalk into a retirement shock and be forced to choose between working longer or living on less money in their later years," he said.
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.
Western Telegraph
25-04-2025
- Business
- Western Telegraph
Pension changes for workers with smaller private pensions
There are now 13 million of these small pots, holding £1,000 or less, with the number increasing by around one million a year, the Government said. Under reforms introduced as part of the Pension Schemes Bill, each individual saver's small pots will be brought together into one pension scheme. People will still have the right to opt out. The Government said the move will also reduce admin costs for businesses. Pensions minister Torsten Bell said: 'There are now more small pension pots in the UK than pensioners – raising costs and hassle for workers trying to track their savings. It also costs the pensions industry hundreds of millions of pounds every year. 'We will automatically bring together people's small pots into one high performing pension, reducing costs as well as hassle for savers. In time this could boost the pension of an average earner by around £1,000.' Recommended reading: Zoe Alexander, director of policy and advocacy at the Pensions and Lifetime Savings Association (PLSA), said: 'The accumulation of small pots creates unnecessary cost and complexity for savers and schemes alike. The PLSA has worked extensively with industry and the DWP (Department for Work and Pensions) to propose solutions and supports the model being proposed by the Government.' Rocio Concha, Which? director of policy and advocacy, said: 'Which? called for the consolidation of small pots under £1,000 before the election, so we are delighted that the Government is committing to doing this.' Gail Izat, workplace managing director at Standard Life, part of Phoenix Group, said: 'The introduction of consolidators that can administer these pots effectively and invest them dynamically will be a step forward.' The long-anticipated pensions dashboard is designed to consolidate all retirement savings into a single, secure online hub. Keeping track of pensions is notoriously challenging, with the average worker accumulating 11 different pension pots over their lifetime. This has resulted in £26.6 billion in lost pensions across the UK, according to the Pensions Policy Institute and the Association of British Insurers.
South Wales Argus
25-04-2025
- Business
- South Wales Argus
Pension changes for workers with smaller private pensions
There are now 13 million of these small pots, holding £1,000 or less, with the number increasing by around one million a year, the Government said. Under reforms introduced as part of the Pension Schemes Bill, each individual saver's small pots will be brought together into one pension scheme. People will still have the right to opt out. The Government said the move will also reduce admin costs for businesses. Pensions minister Torsten Bell said: 'There are now more small pension pots in the UK than pensioners – raising costs and hassle for workers trying to track their savings. It also costs the pensions industry hundreds of millions of pounds every year. 'We will automatically bring together people's small pots into one high performing pension, reducing costs as well as hassle for savers. In time this could boost the pension of an average earner by around £1,000.' Recommended reading: Zoe Alexander, director of policy and advocacy at the Pensions and Lifetime Savings Association (PLSA), said: 'The accumulation of small pots creates unnecessary cost and complexity for savers and schemes alike. The PLSA has worked extensively with industry and the DWP (Department for Work and Pensions) to propose solutions and supports the model being proposed by the Government.' Rocio Concha, Which? director of policy and advocacy, said: 'Which? called for the consolidation of small pots under £1,000 before the election, so we are delighted that the Government is committing to doing this.' Gail Izat, workplace managing director at Standard Life, part of Phoenix Group, said: 'The introduction of consolidators that can administer these pots effectively and invest them dynamically will be a step forward.' The long-anticipated pensions dashboard is designed to consolidate all retirement savings into a single, secure online hub. Keeping track of pensions is notoriously challenging, with the average worker accumulating 11 different pension pots over their lifetime. This has resulted in £26.6 billion in lost pensions across the UK, according to the Pensions Policy Institute and the Association of British Insurers.
North Wales Chronicle
24-04-2025
- Business
- North Wales Chronicle
Pension changes for workers with smaller private pensions
There are now 13 million of these small pots, holding £1,000 or less, with the number increasing by around one million a year, the Government said. Under reforms introduced as part of the Pension Schemes Bill, each individual saver's small pots will be brought together into one pension scheme. People will still have the right to opt out. The Government said the move will also reduce admin costs for businesses. Pensions minister Torsten Bell said: 'There are now more small pension pots in the UK than pensioners – raising costs and hassle for workers trying to track their savings. It also costs the pensions industry hundreds of millions of pounds every year. 'We will automatically bring together people's small pots into one high performing pension, reducing costs as well as hassle for savers. In time this could boost the pension of an average earner by around £1,000.' Recommended reading: Zoe Alexander, director of policy and advocacy at the Pensions and Lifetime Savings Association (PLSA), said: 'The accumulation of small pots creates unnecessary cost and complexity for savers and schemes alike. The PLSA has worked extensively with industry and the DWP (Department for Work and Pensions) to propose solutions and supports the model being proposed by the Government.' Rocio Concha, Which? director of policy and advocacy, said: 'Which? called for the consolidation of small pots under £1,000 before the election, so we are delighted that the Government is committing to doing this.' Gail Izat, workplace managing director at Standard Life, part of Phoenix Group, said: 'The introduction of consolidators that can administer these pots effectively and invest them dynamically will be a step forward.' The long-anticipated pensions dashboard is designed to consolidate all retirement savings into a single, secure online hub. Keeping track of pensions is notoriously challenging, with the average worker accumulating 11 different pension pots over their lifetime. This has resulted in £26.6 billion in lost pensions across the UK, according to the Pensions Policy Institute and the Association of British Insurers.
