What Does Retirement Really Cost? New Figures Reveal a Changing Picture

How much do you really need to live well in retirement? It’s a question many of us put off, but a new report from Loughborough University, in partnership with the Pensions and Lifetime Savings Association (PLSA), offers up-to-date answers to help you plan with confidence.

The latest update to the Retirement Living Standards shows that while the cost of a basic retirement has come down, the amount needed for a moderate or comfortable lifestyle has crept up slightly. Here’s what you need to know.

A More Affordable Basic Lifestyle

If you’re aiming for a simple retirement – covering the essentials with a few small treats – the good news is that costs have fallen:

• £13,400 per year for a one-person household
• £21,600 per year for a two-person household

These reductions are largely down to falling energy prices and small tweaks in how people are spending day to day. Weekly energy costs have dropped by over £8 for individuals and more than £12 for two-person households, showing how recent price changes can make a real difference.

This “minimum standard” includes basics like food, clothing, utilities, and transport, plus a few extras like a UK holiday and a couple of leisure activities each week.

But ‘Moderate’ and ‘Comfortable’ Costs Are Rising

If your vision of retirement includes a bit more freedom—maybe a second-hand car, the odd European break, or regular nights out—you’ll need more to cover it.

Annual costs for these lifestyles have risen slightly, in line with inflation:

Even with energy savings, the rising cost of everyday goods and services means planning ahead is more important than ever. These figures also don’t include rent or mortgage payments, so if you’re likely to be paying for housing in retirement, that needs to be factored in too.

Retirement Living: Not Just About Couples

This year’s update also reflects a modern take on retirement. Instead of using the terms “single” and “couple”, the report now talks about one-person and two-person households, recognising that not everyone retires with a romantic partner.

Interestingly, while only 22% of people currently live alone, even fewer – just 12% – say they want to live alone in retirement. Whether it’s a partner, family member, or friend, most people expect to share their later years with someone else – and that can make retirement living much more affordable.

Planning for Your Future

These standards aren’t about setting fixed targets. They’re about helping you picture what life in retirement could look like – and what it might cost to live the way you want to live.

They also highlight the importance of personalisation. Your retirement might not fit neatly into one category. You might want to live more modestly day to day, but splurge on travel. Or you might prioritise helping family over eating out. Your plan should reflect that.

And of course, the figures only tell part of the story. Knowing how much income you’ll need is one thing – working out where it will come from (pensions, savings, investments, or other assets) is something else entirely.

Your Next Step: A Free Financial Roadmap

If you’re unsure whether you’re on track for the retirement you want, or if you’d simply like a second opinion, we’re here to help.

At Chesterton House, we specialise in Values-Based Financial Planning that helps people get their entire financial house in order. That means making sure your money supports the life you want, not the other way around.

We offer a free initial conversation and a personalised financial roadmap to help you understand where you are now and what steps to take next.

📞 Book your free chat today and start planning a future that works for you.