What’s the price of a comfortable retirement?
“How much do I need for a comfortable retirement?” is one of the most important questions clients ask, and often the hardest to answer clearly.
The PLSA’s Retirement Living Standards help bring this to life, offering three lifestyle tiers: minimum, moderate and comfortable. They’re a useful framework to help financial advisers guide clients from vague hopes to defined goals.
And with the cost of living rising, what “comfortable” looks like financially has changed.
How much do you need for a comfortable retirement?
Here are the latest PLSA figures (Feb 2025):
| Lifestyle | Single person | Couple |
|---|---|---|
| Comfortable | £43,400 | £59,000 |
| Moderate | £31,600 | £43,300 |
| Minimum | £14,400 | £22,800 |
Source: Retirement Living Standards 2024_research_report.pdf
These figures assume retirement at State Pension Age and that the individual or couple owns their home outright. That’s a big caveat - for clients still paying a mortgage or renting, the required income will be higher. The PLSA numbers are designed to educate the unadvised, so advisers need to use them as a framework rather than a definitive benchmark.
A comfortable retirement means holidays abroad, a car replaced every five years, regular meals out and leisure activities. Moderate is more modest - a UK holiday and some socialising. Minimum covers the basics.
These benchmarks turn lifestyle ambitions into real, relatable numbers, but need adviser context.
Pension income vs reality
The full State Pension (20256/2) is around £11,973 a year. That falls short of even a minimum lifestyle.
To top that up to a comfortable income, a single client, just before State Pension Age could need a pension pot of nearly £550,000, based on current annuity rates for a 3% escalating single-life pension (around £5,800/year on a £100,000 fund at 65). Using a simple factor of 17 gets you to a similar place.
That’s a significant gap - and exactly where advisers add value: -
- Encouraging early, consistent saving
- Making use of pensions, ISAs and other wrappers
- Building investment strategies with drawdown flexibility
How advisers can use this
Use clear standards like those from the PLSA:
- Provide a concrete savings goal - instead of vague targets, show clients exactly how much income they’ll need for a comfortable, moderate or minimum retirement.
- Quantify future income - with the State Pension currently at £11,502 per year, you can quickly identify how much more is needed to reach their chosen lifestyle level.
- Tailor the solution - build a plan using pensions, ISAs, annuities and drawdown. Every client will need a personalised mix depending on their assets, goals and timeframe.
- Support ongoing reviews - retirement isn’t static. Circumstances change. Regular reviews let you adapt and keep clients on track. By breaking the challenge down into goals, gaps and strategies, you can turn retirement planning into something both practical and motivating.
You can also explore how our retirement investing solutions support advisers in building portfolios that align with these specific retirement goals.
Why planning early pays off
The earlier clients start, the more powerful compound growth becomes. Even modest contributions, when invested wisely over time, can snowball into meaningful retirement income. Starting early also gives clients more choice, they can afford to take more investment risk, reduce their working hours gradually, or set more ambitious lifestyle goals.
For advisers, helping clients understand this timeline is one of the most valuable conversations you can have.
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This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
