The Pensions and Lifetime Savings Association (PLSA) recently updated its Retirement Living Standards, raising the bar for what is considered a “comfortable” lifestyle in retirement. For 2025, the annual expenditure for couples has increased from £59,000 to £60,600, while for individuals, it has risen from £43,100 to £43,900. These figures reflect the amount needed each year, after tax, to maintain a comfortable standard of living during retirement.
While these increases may seem minor at first, they highlight a significant trend: the cost of sustaining a fulfilling and secure lifestyle in retirement is continuing to rise.
What Are Retirement Living Standards?
The Retirement Living Standards (RLS), established by the PLSA, outline the necessary annual expenditure for three levels of retirement living: minimum, moderate, and comfortable. These standards are based on extensive research and input from the public across the UK, capturing real-life expectations and needs at each level. The RLS is intended to provide a clear, relatable guide for individuals to plan effectively for their retirement.
What Does a “Comfortable” Retirement Really Mean?
The PLSA defines a “comfortable” retirement not as a life of excess, but as one where you have financial freedom and flexibility in your lifestyle. It allows for regular holidays, dining out, and cultural activities, and includes enough room for maintaining a car, as well as a generous budget for clothing, leisure, and technology. Importantly, these standards are updated regularly to reflect changing living costs, inflation, and evolving consumer expectations.
Why the Update Matters
The Retirement Living Standards act as a national benchmark, giving individuals a snapshot of how inflation, longevity, and changing lifestyles are shaping retirement expectations. Although these figures might seem modest to some, they serve as an important reference point for assessing long-term financial security. This is especially relevant as we look at the future of retirement planning, where the gap between expected and actual outcomes can be wide.
Planning for Your Retirement
Retirement planning is less about reaching a specific savings target and more about ensuring your lifestyle is sustainable. Whether that means more travel, more time with family, or simply more freedom, the key is developing a strategy that supports these goals. This involves considering factors like volatility, inflation, interest rate changes, market cycles, and tax efficiency. Equally important is having a flexible plan that can adapt to life changes over time, ensuring your goals remain aligned with your evolving needs.
Reviewing Your Retirement Plan
The PLSA’s updated standards are a good reminder to revisit your retirement plans. For many, the question is not “Do I have enough?” but rather “Does my plan support the lifestyle I want to lead?” With rising costs and longer life spans, it’s crucial to regularly review your financial plan. Key elements like portfolio diversification, tax wrappers, withdrawal strategies, and liquidity planning all play a vital role in maintaining a retirement that offers more than just basic comfort.
A financial adviser can guide you on how these strategies might affect your retirement options and ensure your plan remains adaptable.
Tools and Guidance for Staying on Track
The Saltus pension calculator can help you assess if your current retirement plans align with your future goals. After that, working with a financial adviser to create a personalized cash flow plan and retirement strategy can help solidify your approach.
Key Considerations for Reviewing Your Retirement Plans
With the PLSA’s revisions in mind, now is the perfect time to:
- Reevaluate your spending assumptions and longevity expectations
- Adjust your withdrawal strategies if necessary
- Diversify your investments beyond traditional asset classes
- Revisit your intergenerational and philanthropic goals
Final Thoughts
The updated standards from the PLSA offer an excellent opportunity to pause and reassess your retirement strategy. If you are unsure whether your plans are on track or feel uncertain about your approach, consider speaking with a financial adviser to get expert guidance. Your retirement should reflect your goals and aspirations, and a solid plan can help you achieve that with confidence.
