How to bring retirement income needs to life

15 November 2023
The Retirement Living Standards are a fantastic introduction to income needs in retirement, especially for employees who may not receive individual financial advice and are looking for guidance about how much they may need in retirement.


In January 2023, the Pensions and Lifetime Savings Association (PLSA) announced their new 2022 Retirement Living Standards. They created these living standards to help people picture what kind of lifestyle they could have in retirement.


Source: Pension and Lifetime Savings Association, January 2023.

The standards show what life in retirement looks like at three different levels, Minimum, Moderate and Comfortable living which you can see along the top of the table above. You then see what a range of common goods and services would cost for each level underneath.  They’ve further split this down in to values for singles and couples, and for living in or outside London. What you’re looking at here are the figures for couples who live outside London. 

Now this is of course a very rough average but you as an employer could use these for example, to explain your employees that an average couple outside of London looking for a moderate retirement would need to have an income of roughly £34,000 per year.  This would help them with the maintenance of their house, have £127 per week for food, run a car and replace it every 10 years etc.

We know many people don’t know how much income they need in retirement and only have a vague sense of what they should be targeting. So why not add the Retirement Living Standards to your internal website?  These would give employees an idea of how much income they should be targeting.

The power of these Retirement Living Standards lies in giving people a real sense of what they'll be doing and how they could be spending their money when they finish work.  They explain to employees about the building blocks of their lives - their car, their home comforts, how much they can give their family, the kind of holidays they’ll have, and helps them visualise what they want in their retirement and should help getting them to engage with their pension.

For a complete list of all the Retirement Living Standards for both singles and couples, living inside or outside London, we’ve provided them in the following table.

Level  Location  Amount (Single)  Amount (Couple) 
Minimum  Ex London  £12,800  £19,900 
London  £14,300  £22,400 
Moderate  Ex London  £23,300  £34,000 
London  £28,300  £41,400 
Comfortable  Ex London  £37,300  £54,500 
London  £40,900  £56,500 

Thankfully for many, their basic income needs will mostly be met if they receive the full new state pension. This is £10,636.60 in 2023/24. Checking the government’s website will explain how much they’ll receive, and perhaps if they know the minimum Retirement Living Standards will be met, may encourage them to target a higher income and save more in to their pension.

So, the Retirement Living Standards help employees understand the income they’ll need in retirement, and enables them to create a plan to build a large enough pension pot to meet these needs. This has benefits for employers too:

  • Many employers care about their employees financial wellbeing, and helping them achieve their financial goals will be a high priority for these employers.
  • Financial security can have a positive benefit on employees’ mental health, reducing absence rates and workplace conflicts.
  • Engagement is important too. Ensuring employees are well positioned to build a pension pot sufficient to enable them to enjoy the retirement they want, and to retire at the point they want is vital. Employees who would like to retire but lack pension income to do so may be disengaged, have low productivity, and a negative impact on morale. It’s important employees are in a position to stop working when they want to.

The Retirement Living Standards aren’t a silver bullet, but they are simple to comprehend, produced by an independent organisation, and free to access. We know many people struggle to understand how much income they’ll need in retirement, and the majority won’t receive direct financial advice to help them with this. So making this type of guidance easily available to your employees may see engagement with pension planning increase, and that has potential benefit to everyone.