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The true cost of retirement

7 minutes

This content was reviewed and approved by Marc Perry.

From weekly living expenses to pension advice fees, discover the true cost of retirement.

Older couple walking through a forest

The information on this page should not be considered as financial advice. If you are unsure what’s right for you, please make sure you speak to a financial adviser.

Looking forward to retirement? Unsure how much money you’ll need to achieve a comfortable lifestyle? You’re not alone.

Discovering the true cost of retirement will help you understand if you’re ready to retire, what you’ll need to save, and how to get there. From weekly expenses to retirement and pension advice fees, find out the true cost of retirement in our helpful guide.

What are your retirement goals?

With average UK life expectancy for men being 79 years and women 83 years, your pension may need to stretch further than you think.

The first step to effective retirement planning is to set your retirement goals. You may want to travel, buy a new car, or move house. Or perhaps you’d prefer a relaxing, modest retirement after a long working career.

Whatever your preference, it’s important to clearly understand how much you’ll need to fund your retirement. Could you afford to chase your dreams if you retire tomorrow? Maybe you’re considering a pension annuity that guarantees regular payments throughout your retirement years. Seeking professional retirement and pension advice can help you prepare for one of life’s major milestones.

What is the cost of retirement?

The true cost of retirement depends on your individual circumstances, lifestyle goals and financial needs. For example, a two-person household will require nearly £22,000 in annual retirement income to achieve a minimum standard of living. The figure for a single-person household is £13,400.

This guide follows the same three retirement living standards set down by The Pensions and Lifetime Savings Association – minimum, moderate and comfortable.

  • Minimum standard: Enough money to cover your basic needs with some left over to spend how you choose.

  • Moderate standard: More financial security and flexibility than the minimum standard.

  • Comfortable standard: Greater financial freedom and money to spend on occasional luxuries.

All three standards are based on the cost of common goods and services over time and in line with inflation. These include home maintenance, holiday and leisure, transport, food and drink, clothing and helping others like friends and family.

It covers the potential annual costs for both retired couples and individuals. The amount needed can change over time based on rising living costs, inflation and other factors. For instance, the cost of achieving a comfortable retirement has climbed from £43,100 to £43,900 for a single person in the past few years.

Older couple sat on a bench

What is the cost of retirement for couples?

Whether you’re married or living with a long-term partner, the following estimates will help you decide how much pension income you need each year to achieve the retirement lifestyle you want as a couple.

These figures are based on data produced by the Pensions and Lifetime Savings Association and should not be taken as financial advice, and do not represent gross retirement income figures.

Need support with your retirement planning?

We can help. Speak to one of our friendly advisers today and have a commitment-free chat about your retirement plans. 

Request a callback Try our annuity calculator

Standard of living

Minimum

Moderate

Comfortable
Home £200 a year for DIY property maintenance.
 £500 on annual property maintenance plus £300 contingency.
 £600 on annual property maintenance plus £300 contingency.
Holidays/leisure One-week UK holiday plus basic TV and broadband and one streaming subscription. £20 a week per person for activities.
 Two-week, 3* all-inclusive foreign holiday plus one long weekend UK break with £321 spending money. Basic broadband and TV plus two streaming services. £43 a week per person for activities.
 Two-week, 4* half board foreign holiday with £100 a day spending money plus three long weekend UK breaks with £400 spending money per break. Extensive broadband, TV and streaming services. £54 a week per person for activities.
Transport £180 each for annual rail fares, £30 per couple for monthly taxi fares. No car, free bus pass.
 £104 each for annual rail fares, £22 per couple each month for taxis. Three-year-old small car replaced every seven years.
 £208 each for annual rail fares, £22 per couple each month for taxis. Three-year-old small car replaced every five years.
Food/drink Approximately £109 per couple for weekly groceries, £60 each month for eating out, £24 per month for takeaways.
 £103 for weekly groceries, £63 every week on eating out, £21 on weekly takeaways. Also, £106 per month to take others out for meals.
 £134 for weekly groceries, £85 every week on eating out, £32 on weekly takeaways. Also, £105 per month to take others out for meals.
Clothing etc Around £450 per person per year for clothing and footwear.
 Annual clothing and footwear budget per person up to £1,548 each year.
 Up to £1,548 annual clothing and footwear allowance per person.
Helping others 12 gifts of £20 for birthdays and the same for 12 Christmas gifts.
 12 gifts of £30 for birthdays and the same for 12 Christmas presents, plus £200 per household for charity donations. Additionally, £1,000 to help family/friends.
 12 gifts of £50 for birthdays and the same for 12 Christmas presents, plus £300 per year for charity donations. Also, £1,000 for supporting family/friends.
Estimated annual cost £21,600
 £43,900
 £60,600

Older couple sitting on the beach watching the sunset

What is the cost of retirement for single people?

If you’re single and maybe living alone, you’re likely to need less money to fund your retirement than most couples.

Again, these figures are based on Pensions and Lifetime Savings Association data and should not be taken as financial advice, and do not represent gross retirement income figures. Here’s what your retirement expenditure may look like as a single person:

Standard of living

Minimum

Moderate

Comfortable
Home £200 a year for DIY property maintenance.
 £500 a year to maintain condition of your property, £300 contingency.
 £600 a year to maintain condition of your property, £300 contingency.
Holidays/leisure A week long UK holiday. TV license and broadband plus a streaming service with ads. £20 per week for activities.
 A fortnight 3* all-inclusive holiday in the Med and a long weekend off peak break in the UK. TV license and broadband plus two streaming services. £43 per week for activities.
 A fortnight 4* holiday in the Med with around £100 per person spending money and 3 long weekend breaks in the UK with £400 spending money per break. Extensive bundled broadband, streaming and TV entertainment subscription. £54 a week for activities.
Transport No car, free bus pass, £30 per month for two taxi trips, £180 per year to cover 3 rail journeys.
 3-year-old small car, replaced every 7 years, £22 a month on taxis, £104 per year on rail fares.
 3-year-old small car, replaced every 5 years, £22 a month on taxis, £208 per year on rail fares.
Food/drink Around £55 a week on groceries, £30 a month on food out of the home, £12 per month on takeaways.
 Around £56 a week on groceries, £32 a week on food out of the home, £11 a week on takeaways, £106 a month to take others out for a monthly meal.
 Around £75 a week on food, £42 a week on food out of the home, £21 a week on takeaways, £106 a month to take others out for a monthly meal.
Clothing etc Up to £450 for clothing and footwear.
 Up to £1,548 for clothing and footwear.
 Up to £1,548 for clothing and footwear.
Helping others £20 for each birthday and Xmas present.
 £30 for each birthday and Xmas present, £200 a year charity donation, £1,000 for supporting family members e.g. paying for grandchildren activities.
 £50 for each birthday and Xmas present, £300 per year charity donation, £1,000 family support.
Estimated annual cost £13,400
 £31,700
 £43,900

What else should be factored into the cost of retirement?

Everyone has a different view of retirement. The amount of money you’ll need to fund the lifestyle you want depends on several factors including:

  • The age you retire.

  • How you decide to take your pension money.

  • Any other savings and investments you have.

  • Everyday living expenses.

  • Other family commitments or financial dependents.

  • Your financial dependents.

  • Whatever standard of retirement living you’re looking to achieve, you’ll need to save and plan for it now. You can check how much State Pension you’ll receive when you reach the age of 66 (rising to 67 between 2026 and 2028). You may have other savings, investments, private pensions and annuities to call on to boost your retirement income.

Retirement doesn’t necessarily mean giving up work for good either. Many people want to keep working when they reach State Pension age, and around one in six over 55s (the age at which you can currently draw from your private pension) in the UK choose to unretire and go back to work, whether full-time, part-time or self-employed.

What is the cost of retirement and pension advice?

One of the best ways to plan for retirement is to seek professional retirement and pension advice. You’ll be paying for the expertise of qualified advisers who’ll guide you through your options and help you get maximum value from your retirement savings.

The cost of pension and retirement advice depends on the type of pension, your retirement goals, the advice you choose and other factors. For example, professional and affordable advice from LV= starts from as little as £995.

You can also explore your options by booking a friendly, commitment-free chat with one of our retirement experts. You won’t pay any fees until you agree to one of the services. There are several flexible payment options such as deducting the fees from your pension savings or making a single, one-off payment.

You can buy an annuity without professional financial advice, but it’s worth noting, you’ll still be charged commission to cover the arrangement fee which is taken from your pension pot.

Ultimately, getting the right retirement advice can boost your pension pot and offer genuine value for money for a minimal investment. It can ensure you live comfortably and have enough money to live on to enjoy retirement to the full. Not only that, but the advice you receive will consider your tax position to ensure you’re taking your pension pot in the most tax-efficient way.

Are you prepared for the cost of retirement?

It’s never too early to start thinking about retirement. The earlier you start saving into a pension, the bigger your pot could be when you finally retire. But with so many different types of pensions, annuities, and other investment related products like drawdown to consider, choosing the best option for you can be difficult.

Need support with preparing for retirement?

Our retirement and pension advice service takes the confusion out of retirement planning. Our expert advisers can help you get the most out of your pension savings. Request a call back today to get your pensions ready for the retirement you want to enjoy.

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