Retirement Planning

Do you need a pension?

A pension provides you with an income when you retire.

Forward planning as early as possible will help you to save enough towards retirement to achieve a particular standard of living. This might be the standard you are accustomed to during your working life or something different.

Retirement is a major milestone where our finances can change dramatically and sometimes people are surprised at how much they need to live comfortably.

Keeping an eye on your pensions, reading your annual benefit statement and regularly reviewing your finances is an important aspect of retirement planning, which should be done at any age.

Having a work place pension means you are regularly saving into your pension and your employer is paying towards your retirement. Before deciding to opt out of a work place pension consider your options as there are various schemes available.

Under the RCPS, there are options such as the Partnership scheme where your employer contributes and you decide how much you pay in. Your employer will also match your payments up to a further 3% of pensionable salary. You do not have to make any payments but you are still saving for retirement.

Retirement Living Standards

The Pensions and Lifetime Savings Association (PLSA) Retirement Living Standards analysis has been updated. It now puts the yearly spend in retirement for a moderate lifestyle for a single person at £31,300. Before the cost of living crisis they forecasted that the annual spend was £23,300.

The State Pension, with the forthcoming 8.5% increase, will be just over £11,500 per year from April 2024.

The Centre for Research in Social Policy at Loughborough University, estimates that a single person in retirement today is spending £14,400 a year for a minimum standard of living, this rises to £43,100 a year on a comfortable retirement.

Couples are spending from £22,400 at the minimum level £43,100 on a moderate level, and £59,000 on a comfortable level.

A Minimum standard includes around £95 for a couple's weekly groceries, a weeks holiday in the UK, eating out about once a month and some affordable leisure activities about twice a week
A Moderate standard ups the amount slightly and includes running a small second-hand car, a week holidaying in Europe and a long weekend break in the UK
A Comfortable retirement includes luxuries such as regular beauty treatments, theatre trips and two weeks' holiday in Europe a year

The details behind PASA analysis can be found on the Retirement Living Standards - external link - page.

State Pension

The State Pension is a regular payment that you may get when you reach state pension age, you need to claim this because DWP do not pay this to you automatically.

On 6 April 2016 the New State Pension was introduced. The new state pension page - external link - contains information and instructions on how to claim your state pension.

You can use the Check your State Pension - external link - website for an estimate of what you may receive.

If you reached State Pension age before 6 April 2016, you could get more money if you delay claiming or stop your State Pension. More information can be found on the Deferring your State Pension - external link page.

Additional information that may be helpful

Age UK have a Pensions Calculator - external link - that allows you to work out how much money you will need in retirement and how much you can expect.

The Money Helper - external link - page contains information to help with explaining how pensions work and can provide impartial guidance for the over 50s.

The Retirement Living Standards (picture your future) - external link - page, contains information about living standards and what life in retirement might look like.

Links that may be helpful

Articles in the news

BBC News Business Pension income needed to retire jumps as family costs rise - external link -.