How much you REALLY need to save to retire comfortably – including holidays abroad

A COUPLE who want a comfortable retirement will need to have an income of £50,00 a year between them, a pension trade body has warned.

The Pensions & Lifetime Savings Association (PLSA) has worked out exactly how much money you need to afford the retirement you want.

The so-called Retirement Living Standards are a guide to help savers work out how much cash they’ll need when they stop working.

They lay out three options, for a minimum, moderate and comfortable retirement. 

Each scenario contains a basket of goods that the PLSA tracks the price of, to help people understand how much they’ll need in retirement. They include everything from household bills, food and drink to holidays, clothing and social activities. 

But the PLSA has had to update the baskets after the Covid pandemic, to reflect our changing priorities.

More money for eating out, a decent budget for personal grooming, and a Netflix subscription are all top of the priority to list for many people in retirement. 

How much money do I need to retire?

The minimum standard covers all of a retiree’s basic needs as well having some money left over for fun.

It includes a week’s staycation each year, eating out once a month, and some affordable leisure activities twice a week - but no car.

The PLSA says to afford this retirement you would need an annual budget of £10,900 as a single person, and £16,700 as a couple. 

That might sound intimidating but it’s important to remember that the state pension will make up part of that income. 

The new full state pension will pay £179.60 a week in the 2021/22 tax year, which is £9,339 a year. 

How much you actually get will depend on the National Insurance contributions you have made. 

The amount needed for this minimum standard has increased by £700 for individuals and £1,000 for couples since the PLSA came up with the guide in 2019.