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What your retirement could look like

A hazard warning sign that says “Old Age Ahead”.

Anyone planning for financial independence (FI) knows it’s hard to picture your life in retirement. Like a precog from Minority Report, you can only glimpse fragments of your future.

However we’ve uncovered intriguing research that might help you fill in the ‘Here Be Dragons’ gaps in your FI map.

The research – Retirement Living Standards in the UK in 2021 – plots three tiers of retirement spending, ranging from minimal to moderate to comfortable.

The paper also serves up insights into what kind of lifestyle that spending really buys, from people already living it.

Much ado about much more than nothing

Retirement research gives you a shortcut to answering that perennial awkward cocktail party question: How much do I need to retire?

Okay, maybe it’s only us who invites those sorts of questions…

Anyway instead of doing laborious calculations on a spreadsheet, you could just pick one of the consensus retirement income answers published by the Pensions and Lifetime Savings Association (PLSA).1

An unexpected bonus of the research is it also incorporates testimonies from retirees and near-retirees drawn from various socio-economic backgrounds and regions across the UK.

If our retirement future is an unknown country then their words act like an audio tour guide.

It tells us something about what really matters to people in retirement. And as ever, the experience of others might help us find our own path.

Plus it’s an interesting read because there’s nowt so queer as folk.

OK, let’s start with the hard data. We’ll then move on to the fluffy anecdotal evidence.

Retirement income standards 2021

A table of retirement incomes for three lifestyle levels: minimum, moderate and comfortable
Source: Retirement Living Standards 2021, PLSA

This table is a bronze, silver, and gold rostrum of annual retirement incomes – as determined by members of the UK public aged 55 or older.

The underlying research explains what you get for your money at each level. We’ll come to that shortly but – spoiler alert – the Minimum lifestyle isn’t factoring in many trips to Ayia Napa.

What’s also not clear from the table is the income numbers are after-tax.

An interesting contrast is the UK median household disposable income2 of £29,900.

The median retired household income is £23,557, according to the ONS. That’s well below the Moderate spending level for couples in this table.

Note that the PLSA expects the State Pension to do much of the heavy lifting in retirement. Especially at the Minimum standard.

This is the single biggest reason why nobody should fear the State Pension being done away with. The social fallout of scrapping the State Pension would be catastrophic for any government.

What really leaps out from the table is how expensive life is for singletons.

The most effective cost-saving measure any retiree can make is to couple-up. No wonder there are so many senior Casanovas out there.

Be sweet to your significant other and keep ‘em healthy. Give flowers, not chocolate. (But think twice before buying them a Peloton!)

The table also invites us to compare our own retirement prospects with the PLSA’s pecking order.

To understand the life of Riley promised by each level, feast your eyes on the next table…

What you get for your money

The three retirement income levels broken down into spending categories

There is much social division written into the curt lines above.

For example, I struggle to imagine life without a car. Then again I don’t need three weeks in Europe per year.

I also know plenty of people who substitute time and talent for money when it comes to gift giving.

You’ll draw your own conclusions. I’d love to hear them in the comments.

While the table forces a statement of spending priorities, the reality is that many of us will drift back and forth across the tiers.

For example, The Accumulators spend less than the Minimum on clothing. We’re in the Comfortable zone on food, though.

Meanwhile our overall budget is closest to the Moderate camp, albeit we undershoot.

Retiree vox pops

What I love about this research isn’t the numbers, however. It’s the voices.

The participants discuss their lived experience for each major spending category.

A portrait thus emerges of retirement reality, painted in the primary colours of what money can buy.

The anonymous quotes below are excerpts from the study’s group sessions.

Food spending

A snapshot of the food spending category for the three retirement incomes

The snapshot above shows the foodie living standard each income band affords. The major difference is eating out and takeaway:

  • Minimums: £45 per month
  • Moderates: £200 per month
  • Comfortables: £533 per month

The Comfortables are clearly loading their plates with much more spice of life than the Minimums. 

At least on the surface.

One of the things the FIRE community has been great at is uncovering ways to enjoy life without throwing money at it. 

In my 20s I spent like The Comfortables on eating out. It was how I lived the life. Now I’m under-spending The Minimums and I’m happy with that.  

Others will think differently. Social eating has shot up the priority list of many after lockdown, as encapsulated by this quote:

I hadn’t realised how important it is for emotional well-being and so on, just the act of sitting down and breaking bread with friends and family, so … I guess what I’m saying is I think that … once Covid has finished, that’s going to go up because a lot of people have realised how important it is.

Moreover, financial flexibility is an important part of social inclusion:

…at one time eating out would have been seen as luxury but to have … take part in society and be … have a reasonable standard of living, you would have to include things like this, wouldn’t you because it’s … not … essential’s the wrong word but it’s part of what it is to be in a modern society isn’t it?

As a lean-FIRE-ee I sometimes wonder if I’ve cut my cloth too tight on this score. We’ll see.

Housing spending

Minimums pay social housing rent. Moderates and Comfortables are assumed to have paid off their mortgages by retirement.

But today’s retirees don’t think the next generation will be so fortunate:

I was just going to say that in my experience at least, the expectation of certainly people in their 30s and 40s, which my kids and nephews and niece and so on all are, very few of them have an expectation now that they will own their house by time they’re 50 or 60.

Personally, I think we’ve fallen short as a country on this. It’s the height of hypocrisy to hoover up housing stock and lock future generations out of the market by failing to build.

The Generational Compact is a cornerstone of society. Earlier generations invest in their children’s future, and their children look after them in old age.

But we’re creating generational divides that put social cohesion at risk.

Meanwhile, up-and-coming generations are meant to bankroll the NHS, long-term care, State Pensions, and clean up the climate crisis. 

Back to retirement, and divorce looms large as a catastrophic roll of the dice in the game of housing snakes and ladders:

…the thing is though I’m in a position where for lots of reasons I… I have to rent, so I have to share a house with somebody… you can’t always guarantee that you’re going to end up owning your own house because circumstances change and things happen don’t they, and people get divorced and have to split their resources and all that sort of thing, and more and more people get divorced after retirement because the fact is when people suddenly find they’ve got to spend a lot of time together…

Divorce is sometimes mentioned in Monevator comments as a third-party calamity. But reading a first-hand account really drove home the awfulness of the situation to me. (Excuse me while I google ‘thoughtful gifts’.)

Speaking of unhappy endings that I’d rather not think about…

Body disposal etiquette

I’ve paid scant attention to funerals. But our focus-grouped retirees have, and they’re very pragmatic:

I think for me, a funeral you know is my party that I’m not actually attending, except (laughs) in a dead fashion! And I’d rather spend the money on you know allowing people to have a good time, without all that money spent at the Co-op, on a box which is just going to be burnt.

I think it’s a logical extension of the country’s descent into … or ascent, depending on your perspective, into being agnostic or atheist that you know it’s the last pillar that’s being kicked away in terms of you know the death ceremony and some official presiding at it, and you just don’t … you don’t need that anymore.

Worst case scenario, you can just donate your body to science and you’re not paying for anything at all, are you?

The retirees have built pre-paid cremation plans into the Moderate and Comfortable budgets. But they’re also tempted by adverts for services that skip the church, cars, and wake.

Thankfully those ads aren’t showing up on my feed yet.

Mrs Accumulator is under instruction to pop me out with the bins. She says she will put me in the freezer so she can still chat to me.

We’re gonna need a bigger freezer.

Health issues

In another ominous sign of the times, some contributors voiced their fears about being able to get medical treatment when they need it.

[A] health plan is probably becoming a necessity, it’s certainly something that I have started actively worrying about … getting any kind of appointments with GPs, dentists, and when you hear about the long, ever increasing waiting lists for NHS, it’s certainly playing on my mind…

I suppose it’s just the way I’ve been brought up, but I’ve always thought of private healthcare as a luxury. It may be that the situation, the circumstances for all of us are changing so that that needs to be revisited…

Mrs Accumulator and I had the same conversation, triggered by the Covid deluge.

Ultimately, private healthcare wasn’t included in the retirement budgets this time around but for how much longer?

Funding the NHS feels like another slow-moving car crash that we’re not grappling with as a society.

Are we prepared to pay more in taxes? Do we help relieve the burden on the NHS by looking after ourselves more? (By which I mean living healthier lifestyles that increase our chances of staving off chronic conditions.)

All the private health insurance in the world won’t save us from dying if we need urgent medical assistance but have to wait five hours for an ambulance.

Social and cultural participation

The social and cultural participation spending category broken down across the three retirement income levels

Comfortables are spending 150% more per person per week on leisure activities than The Minimums. The potential impact of that spending power on a life well-lived is captured in this quote:

Sociability is such an important factor for well-being … sociability and connection and belonging, which is so important for mental health and continuing…

That said, the interviewees also talk about how Covid has forced a reassessment of spending needs in this area. For example, gym memberships have given way to running shoes, bicycles, and walking boots.

Early Mr Money Mustache was a trailblazer in rethinking life’s riches so they don’t cost a packet.

I’m not sure anyone has replaced him in that respect? Let me know who I’m missing in the comments.

The social participation category also includes tech. DVD players are clinging on but streaming is now considered an essential part of engaging with the world at every income level:

My partner, her quality of life would not be the same if she didn’t have Netflix … So these things … as I said, these things were a luxury but then they become a necessity in certain circumstances, don’t they?

Moderates and Comfortables get a smart TV. Comfortables get a bigger smart TV.

(We were warned against that escalation in the movie Trainspotting. Possibly not the best source of retirement advice.)

The contributors are prone to lifestyle creep:

…the other thing I’d say on your list is that at one time, HD TV was kind of like an exotic upscale from standard definition, but now HD is just very basic, and now 4K is becoming a minimum. So I’d say that you’re not far off now where 4K will be just your minimum and HD is already looking a bit old-fashioned.

That person is a marketeer’s wet dream. At some point your eyes can’t tell the difference! And your well-being certainly won’t.

Technical sidebar

Smart speakers are now included for Comfortables but not yet Moderates.

I do wonder how much tech is bought just because the neighbour’s got one?

Some retirees I know would be much better off if they could just get to grips with a smartphone.

I say this with my tongue in cheek after watching many a Boomer respond to a smartphone like a caveman faced with a mortgage loan application. 

On the other hand, I know a pensioner with chronic health issues who loves their smart speaker’s simplicity. They’re also greatly reassured that they can use it to call for help.

I’m sure there’ll be tech in the future that passes me by. Hell, there is now.

Regardless, if you enjoy keeping up with trends and aren’t keen on trade-offs, you should be planning for the Comfortable spending band.

“Hello Future Me”

Retirement is difficult to imagine until you get there. We plan it on colourless spreadsheets and emotionally struggle to relate our parents’ experience to our own.

Friendship groups tend to be intra-generational. I probably know more about the trials of my elders via Monevator than I do from real life.

That’s why I found the retirement thumbnails in this research so fascinating. It let me hear things that people don’t normally talk about.

So what have you got to say for yourselves? Let us know below.

Take it steady,

The Accumulator

P.S. If you don’t like the PLSA’s retirement income numbers then try the ones from Which instead.

  1. The PLSA is a financial industry group. It includes asset managers, consultants, law firms, and fintechs. They’re so keen to get Britain saving for retirement that they commissioned research from Loughborough University’s Centre for Research in Social Policy. []
  2. Disposable income is what’s left after direct taxes, such as Income Tax, National Insurance, and Council Tax. []
{ 60 comments… add one }
  • 1 Al Cam December 1, 2021, 10:36 am

    There are certainly some interesting things in these surveys/studies. HT for highlighting the apparent mismatch with the ONS median household figures. Another apparent dilemma is that other reputable studies show UK pensioners, on average, do not spend all their income and that the gap grows as they age. Curiouser and curiouser!

  • 2 Al Cam December 1, 2021, 10:57 am
  • 3 mr_jetlag December 1, 2021, 11:03 am

    it’s comforting to know that UK retirement is within reach given our FIRE plan. at the same time, I much prefer TA’s anecdotes on early retirement to the anodyne spending stories detailed here. I hope that retirement is more than a list of things to buy, places to visit and foods to eat… the best thing to look forward to for me is all the time to catch up on both internal life (reading, learning, doing) and social life.

  • 4 Jonathan B December 1, 2021, 11:40 am

    To make it simple, the easiest estimate is to assume your living expenses after retirement are the same as they were before. Only adjusting for an actual change, like no longer paying a mortgage if the lump sum pays it off.

    One consequence of that: if you live more minimally when employed, you will not only have more to put into your pension each month but you will need less in your pension pot to retire on with the same lifestyle.

  • 5 Stonebridge Kestrel December 1, 2021, 11:49 am

    Well, lots of interesting things leap out here – I hardly ever watch telly so I’m staggered that “Comfortables” need to spend £60 a month on TV and broadband; I buy my smartphones outright and use them with a cheap sim-only deal (£10 a month for all you can eat), so £28 a month there seems mental to me, too – but the main thing is : WHY CAN’T PEOPLE LEARN TO COOK ? (Sorry about the shouting…)

    Despite being surrounded by restaurant options here in funky East London, I literally never get takeaways. I cook our evening meals from real, fresh ingredients every day. And I’ve done this for my whole adult life (I’m 52).

    There are so many benefits to this that I’m almost at a loss to list them all – it’s healthier, it’s a productive / constructive use of your time (and one major reason why I don’t watch TV very much – I’m in the kitchen with music or podcasts or Radio 4), it offers endless opportunities for self-growth by trying out new things and learning new skills, it’s great for mental health (I’ve always found cooking the best way to relax by getting into a “flow state”), it’s culturally fascinating (I love going on expeditions to specialist Asian food stores to seek out ingredients, for example), and – although we all make mistakes – it’s pretty much always nicer to eat than the deep-fried dreck being carted around endlessly by bozos on Deliveroo death-traps.

    And, of course, it’s just way, way cheaper.

  • 6 Andrew December 1, 2021, 12:21 pm

    @Stonebridge Kestrel

    When both yourself and your partner are spending 2 hours commuting every day, and coming home exhausted, spending ages in the kitchen prepping, cooking and tidying up is the last thing you want to do. Many people don’t get the luxury of ‘learning to cook’ throughout their careers.

    Personally I miss WFH when I could do some dinner prep, or nip to the shop for missing groceries, on my lunch break.

    My personal plan is just to assume my cost of living will be unchanged in retirement, sans mortgage… and try to get as much under my belt while I can.

  • 7 PJH December 1, 2021, 12:22 pm

    I was struck, reading their PDF, that they appear to have managed, across all the socioeconomic areas they tried to cover, to get 84 non-smokers and 0 smokers to participate.

    Tables 4, 5 and 6 all have £0.00 for tobacco everywhere.

  • 8 Chiny December 1, 2021, 12:38 pm

    Important not to miss the need to pay tax – oops, I did. Fortunately my retirement income proved more than adequate to pay it.

    I own a BTL, specially selected to be suitable for the future doddery me, all on the level, small with a sunny patio garden and so on. As a part-owner in the building, I get to discuss with younger owners, maintenance. What an eye opener. None of them do any DIY, not even the basics of painting and certainly not something ambitious like kitchen refurb. Lots of £££ to be saved there, pre- and post-FIRE in that retirement budget.

    I imagine all of us would tweak the PLSA/Which reports but they are certainly an interesting addition to the debate.

  • 9 Pikolo December 1, 2021, 12:54 pm

    @Stonebridge Kestrel £60 for TV and broadband doesn’t seem too odd to me. The cheapest broadband* you can get is £20 according to uSwitch. If you intend to own a TV or a radio, you need a TV license -> £13.25 a month**. So the minimum cost is £33.25 a month.

    Given that the moderate and comfortable levels are supposed to be improvements over the basic level, adding a set of paid channels covering your hobby, or one set of channels per person in a couple can easily take you to £60. There is also the fact that many people won’t be on the cheapest deal available – cancelling broadband is a mentally taxing slog in good health and I can imagine it doesn’t get any easier for older people, so you could end up with broadband price increasing by inflation every year on top of the out of contract price hike.

    *Broadband has to provide at least 35 Mb/s download. I’m excluding the joke offer from PlusNet for £18.95 claiming to provide 10 Mb/s – that’s not usable.
    ** £159 a year for a TV license

  • 10 Hariseldon December 1, 2021, 12:57 pm

    The Accumulator echoes my experience, some parts of my budget would appear minimal, take outs/restaurants ( disappointment in the food rather than meanness) others well beyond comfortable, typically travel for 4 or 5 months a year.

    Everyone is very individual, whilst spending is above comfortable most years, others have been moderate due to other constraints, yet overall happiness is pretty constant despite the difference in spending between the two.

    After 14 years the pot is substantially ahead of where it started but the more expensive lifestyle is easier/more pleasant superficially it’s not happier.

  • 11 Brady December 1, 2021, 1:00 pm

    Has to be comfortable for me before I push that retirement button… just need to concentrate on the long slow slog of building that pension (and not getting divorced!)

  • 12 Stonebridge Kestrel December 1, 2021, 1:13 pm


    Well, of course, there are numerous reasons why people might not be able to cook every day whilst working, and some of them might even be valid (sorry !) – but this is a discussion about spending in retirement.

    Surely people don’t have to rely on deliveries and ready meals when they’re (a) budget-constrained and (b) free to spend their time however they like ?

  • 13 never give up December 1, 2021, 1:20 pm

    Rather than Minimum, Moderate & Comfortable I may need to rename the categories as Comfortable, Luxurious and Abundantly Luxurious to meet my tastes. I’m assuming no rent/mortgage costs there and I’m single. I don’t mean that to sound judgemental to those that spend more.

    If part of retiring early though, is living life differently, minimising waste, and caring about the environment, then I’ve no idea how I could spend as much as £33,600 a year. Presumably I’d need to have a large car payment, be constantly flying somewhere and upgrading or replacing stuff on a constant basis to get somewhere near. As these all fail on the environment front they’re not for me.

    It’s really useful for these studies to be conducted. Until I saw it last week I didn’t realise these were out there. For anyone new to thinking about retirement who hasn’t been tracking their expenses, these are a useful starting point I would have thought.

  • 14 Boltt December 1, 2021, 1:56 pm

    I find these median income figures a little confusing – I tend to take them literally as the ranked 50th percentile of household disposable incomes.

    But looking at details(legends) I believe it’s equivalised household income, probably on the reference family unit of 2 adults living together.

    My understanding of the equivalisation process is to divide the household income by the following total number:

    First adult .67+
    Each 14+ in home .33+
    Each under 14 +.2

    So roughy – singletons get their incomes increased by 50%. A family with 3 teenager get their income halved.

    I’d love to see some “raw” numbers



  • 15 Mr Optimistic December 1, 2021, 2:29 pm

    The numbers sound pessimisic to me. £36k equates to what, £50k gross when the median income per household is less than £30k, with the median household raising families, paying off mortgage, paying into pensions, but still managing ?
    In addition to income think you need a capital budget for the periodic lump sum outlays, so need savings unless you are budgeting for a sinking fund.
    However medical convenience is an increasing issue but this comes under the capital budget. Need savings to jump the queue ( not escallating health insurance premiums with limits and excesses).

  • 16 Brod December 1, 2021, 4:04 pm

    @NGU – I’m with you. we (my wife and I and are 9 & 10 y.o.) live very comfortably in South London about half way between minimum and moderate. I suspect, though, they’re including saving for replacing white goods, the roof, etc, and not just straight consumerism? Which as employed, we don’t do, though we save a small amount into an “unexpected stuff” fund each month.

    Btw, I reckon many on the moderate / comfortable are in receipt of final salary pensions. So I guess we’re mostly going to be in the sub-moderate category in the future.

  • 17 ermine December 1, 2021, 5:52 pm

    It’s been pretty well known for ever that being single is dearer pro rata that for couples, though that win is tempered somewhat if the couple becomes three 😉 The biggest financial mistake in my life was buying a house as a single man, because I got to eat all the negative equity 🙁 Holidays are harder too – easier when you’re young and can share with a pal but as time goes on you tend to want more comfort and find everything is set up for couples+

    > Some retirees I know would be much better off if they could just get to grips with a smartphone

    Throw the bugger at the wall. At least you know why it doesn’t work. 😉 Seriously, it’s just a computer, it’s not that hard. What is really, really hard is not allowing it to make you an obnoxious rude shmuck with people IRL and losing your attention span to FAANG The Borg. The tech is easy to master, just hard to use without giving your soul away.

    I don’t find those numbers outrageous. I know a single fellow and he’s pretty much on Minimum (but he owns his own house outright, the fact it’s too big for his is part of his problem) and the thing that will save his backside is the State Pension in a few years time.

    I personally am towards the right of that chart. Though WTF is it with the replacement of cars all the time? But we are probably heavier on holidays and leisure. I am not sure I am actually spending that much, but some of the challenge of retirement spending is to switch the flow from saving to spending, ‘cos you ain’t gonna live for ever.

  • 18 Hak December 1, 2021, 6:21 pm

    It is polls and data like this which just remind me how “different” my wife and I are compared to the norm.

  • 19 Al Cam December 1, 2021, 6:34 pm

    @Boltt (#14):
    Try this:
    which gives the percentile points of the income distribution (both before and after tax), estimated from the Survey of Personal Incomes each year. Noting that: the table only covers individuals who have some liability to Income Tax

  • 20 weenie December 1, 2021, 6:39 pm

    A very interesting read.

    If my own parents’ retirement is to go by, they spent lavishly when they first retired, but now in their late 70s and early 80s, they just spend the bare minimum and feel that they have a good quality of life (COVID restrictions notwithstanding).

    For a while, I’ve been basing my own numbers on ending up in the Moderate Single category of the Retirement Living Standards, not realising that housing costs weren’t included, ie mortgage or rent. If I take that into account, it appears that if I continue along my path, I’m shooting for somewhere in between Minimum and Moderate, which might be ok but probably won’t be, in terms of luxury options.

    Another incentive for me to get overpaying my mortgage but how to balance it so I don’t hamstring the progress I’ve been making on building up my investments!?

    As for it being expensive for a singleton, well I guess I need to get back on the dating game, although rather than hook up with a senior Casenova, I think I’ll be hitching up my cougar boots!

  • 21 Boltt December 1, 2021, 7:08 pm


    Thanks for that, it’s always interesting to find your percentile. Although I preferred the answer when I was working!

    We should invent the hours free time equivalent….


  • 22 Al Cam December 1, 2021, 7:25 pm

    @ Boltt (#21):
    Indeed – and worth noting the data covers tax years 1992/93 to 2018/19 only – so it is a bit stale.
    BTW, good spot re equivalencing. However, the ONS axes label “Equivalised household disposable income of individuals (in £1000 bands)” takes a bit of thinking about!
    IMO, a good explanation of Equivalisation is at
    https://en.wikipedia.org/wiki/Equivalisation) and Reference 2 therein is rather good too.

  • 23 ZXSpectrum48k December 1, 2021, 7:36 pm

    The “Comfortable” lifestyle doesn’t look vcomfortable at all. If I told my partner, that all we’d get in retirement is 3 weeks/year in Europe, I’d be seeing a divorce lawyer sooner rather than later. That sounds rubbish.

    Moreover, I don’t see how you consider it a “comfortable” lifestyle and rely on the NHS. Where is the medical insurance? Food budget looks tolerable but I cannot see a decent budget for tech. GPUs aint cheap you know. Then again the two cars seems a bit unnecessary!

    My main conclusion though is if this is representative of the quality of research going on at the Centre for Research in Social Policy, Loughborough Uni, then I’d close it down ASAP.

  • 24 KeepOnKeepinOn December 1, 2021, 7:51 pm

    Cash flow planning all done – luckily to the right of comfortable.
    Spending more time now researching & reflecting on how we’ll spend our days.
    The numbers are easier – but the other stuff more exciting….

  • 25 steveark December 1, 2021, 8:34 pm

    I find retirement to have been wonderful the last six years here in the rural south of the US. I haven’t taken any government money so far but in four years I will start getting $72K USD from Social Security. I’ll only have to withdraw 1% of our assets to fund up to our six figure lifestyle then. I keep earning money that I don’t need or want doing consulting as a favor for others. There is volunteer work galore chairing nonprofit foundations and college trustee boards and at my old university, mentoring students. I am recruiting new industries into our area to provide good green STEM jobs as a volunteer. Plus there is running, tennis, pickleball, hiking, fishing, travel and blogging. It is a comfortable life with some busy days and some not so busy. Its is like the best of my 9 to 5 career days without angry bosses or stressful deadlines. I highly recommend it to anyone who has adequately prepared.

  • 26 Debt Free Life (Marti) December 1, 2021, 11:26 pm

    I guess that most people reading Monevator know what they need for financial independence having put the hard miles in (research etc). Cash flow/ budget plans etc

    However for the majority of people looking at retirement needs the PLSA is a great (tool) starting point. Imagine going to a pension meeting and asking the prospective retiree how much income is required for them to meet the standard of living they require and finding that they have no idea. Unfortunately a very high number of people have not give it much thought at all. The PLSA figures provide a useful starting point and allows many to visualise what is needed.

    Financial education for all is necessary to ensure we all enjoy a comfortable retirement.

  • 27 Merlotman December 1, 2021, 11:37 pm

    This country’s fixation with car ownership never ceases to amaze (and disappoint) me. Why would a retired couple need a car each? We have not yet retired and have children in various stages of leaving home and share 2 cars between 5. I also would never buy new or only keep for 5 years. Having said this we are definitely on the right hand side of comfortable and I do own 5 bicycles. Also agree with ZX if you have 52 free weeks and a comfortable lifestyle why take only 3 weeks away from home. For a comfortable couple the survey suggests a retired couple sitting at home all year eating takeaways while looking at their freshly washed cars on the drive. A bit sad in my view.

  • 28 Naeclue December 2, 2021, 1:56 am

    This article got me thinking about all the things we do that cost next to nothing.

    During the winter we regularly go on Sunday morning walks with a group of friends, culminating in a pub lunch. We usually use public transport, so don’t even need a car.

    We both have 60+ London Oyster cards costing £20 per year. That provides free transport to free facilities such as parks, squares, world class museums and gallerys, etc. Most exhibitions are fairly cheap entertainment for the times we do have to pay.

    Library membership provides totally free access to great literature, travel guides, etc. They even offer free audiobooks.

    Some of the best times we have had just involved sitting on a beach or next to a lake in an evening with friends or family eating take away fish and chips.

    On the money saving side, more time is available to shop around, especially for things like insurance and broadband renewals which can easily double if you just let them roll over. We found our home and car insurance both dropped after we stopped work. Cheaper home insurance was understandable as we were at home more, cheaper car insurance made little sense though as we drive more!

    On the other side, our yacht is a money pit and makes no financial sense. It would be cheaper to charter, which we do every year as well despite having our own boat.

  • 29 BillD December 2, 2021, 2:12 am

    An interesting read. We’re probably more towards the moderate category from minimal but I cannot imagine how I could spend up to £750 on clothing each year! Probably my most frequent purchase is walking shoes and boots, those soles just wear down with the miles. Sitting here in some jeans I bought in Matalan for a tenner some years ago…

  • 30 Learner December 2, 2021, 8:11 am

    As usual, Housing cleaves society in two.

    “Minimums pay social housing rent. Moderates and Comfortables are assumed to have paid off their mortgages by retirement.”

    Under the boot of DWP, or living the good life. Yikes.

  • 31 mr_jetlag December 2, 2021, 8:16 am

    @Naeclue – my goodness, that last paragraph after all the frugal things you listed!

    I’m with you though. I would probably stay on land and get one or two classic roadsters as sightly shallower money pits.

  • 32 Al Cam December 2, 2021, 8:36 am

    Insurance quotes/prices often seem non-sensical to me. My car insurance initially increased on retirement even though my mileage dropped significantly – IIRC playing with your profession/occupation was the trigger. However, once I was 55 it dropped again. Also, one other year I (very sadly) tracked some quotes over time and IIRC the closer you got to your renewal date seemed to impact the quote too – although it was a bit noisy!

  • 33 Ducknald Don December 2, 2021, 9:07 am

    Clearly all the people here that are spending more than me are extravagant consumers who should be locked away for the sake of society and the environment. On the other hand anybody spending less than me is a total loser who should be put out of their misery.

  • 34 Al Cam December 2, 2021, 9:28 am

    @ZX (#23):
    The Simon Garber article (ironically? linked at £23,557) offers some thoughts.

  • 35 Simon James Hatch December 2, 2021, 9:29 am

    @ Al Cam #32
    Martin Lewis has done similar tracking and the sweet spot for car insurance is 23 – 25 days before renewal day (similar also for home insurance).
    It appears the insurance companies view this behavior positively as you are viewed as a planner and less of a risk, compared to those who renew last minute!

  • 36 Al Cam December 2, 2021, 9:31 am

    Another useful source of info (including IIRC anecdotes from interviews, etc) is ELSA, see: https://www.elsa-project.ac.uk/
    I vaguely recall there might be some restrictions on using/obtaining the ELSA data.

  • 37 Miner 2049'r December 2, 2021, 9:41 am

    It would be interesting to see what average life expectancy was for each three.

  • 38 Tom A December 2, 2021, 10:49 am

    As a newbie here, I am still slightly confused by trying to assess current pension valuations against future pension income in the presence of inflation. Say I’ve got a £500k SIPP at age 45, what predicted interest rates and what growth rates should be used to calculate whether I’m on track to retire at say 55?

    Likewise, if I contribute say £20k per annum, how do I know I’m not going to exceed the lifetime allowance assuming it doesn’t change?

    Any advice and pointers to calculators and assumptions would be appreciated!

  • 39 The Rhino December 2, 2021, 11:11 am

    Funnily enough, just had my SIPP annual statement arrive. Assumptions there are 5% returns, 2% inflation, 1.25% fees.

  • 40 Dazzle December 2, 2021, 11:40 am

    Steveark “but in four years I will start getting $72K USD from Social Security.”
    How does this work? I thought the US was all low tax / low benefits. The UK’s state pension, which I assumed was the same as US SS, is only ~£9k pa, how is the US ~£50k???
    Is it dependent on the contribution rate, surely not all US pensioners get ~£50k?

  • 41 ZXSpectrum48k December 2, 2021, 11:45 am

    @Al Cam. I really question the Loughborough research piece. I think Garber is more on point.

    I’ve been helping to pay for my parents’ retirement since I bought them a house almost 20 years ago, so I’ve got a very good idea of what they spend annually. Now, they don’t pay for house maintenance and I buy them one “luxury holiday” per year. They don’t spend more than £25k/annum, so absolute max perhaps £35k including what I spend on them. Their standard of living seems much better than the “comfortable” couple on £50k in the report.

    Their ability to go on a vacation at the drop of the hat meant that (pre COVID) they could be pick up multiple two week vacations abroad very very cheaply. One second hand car (bought at 3 years old and held for 5 years), one moped. They bought the majority of their food from M&S. Clothing and home goods from John Lewis, Next etc. Their day to day living costs are pretty low. It wasn’t a luxury lifestyle but it was comfortable.

  • 42 BBBobbins December 2, 2021, 12:37 pm

    I find studies/surveys like this helpful and a bit comforting while at the same time a bit worrying. I suspect most of us would like to aim towards a “comfortable” level of income or above while recognising that if the trade offs in getting there are too much we might settle for less.

    Downside problem is that if we slip to “moderate” there is really not a lot of headroom for the rainy day.

    And then we get into variables which will vary by individual/couple – to me 3 weeks euro holidays is not “comfortable” but de minimis, my interests and hobbies are such that I would need much more travel budget. My tradeoffs would be most obviously be in dine out/takeaway budgets. A couple with conflicting priorities on those comfort elements could easily get into problems either financially or relationshipwise.

    I could see my travel bug being satisfied by following the US cliche of buying a motorhome and enjoying long roadtrips (subject to post Brexit Schengen restrictions) in cheaper Euro countries. But that’s capital tied up even if actual depreciation rate is pretty low and if it didn’t work for my partner….

    Of course over a retired lifetime I might easily expect the lure of travel to decline once I hit mid 70s so elements of spend get rebalanced. And of course if I/we end up there with appetite and pots of cash there will always be the cruise lines and luxury escorted tours willing to relieve us of such cash.

  • 43 BBBobbins December 2, 2021, 1:43 pm

    @ Tom A

    Simplest answer is to use one of the many retirement calculators out there and be conscious/conservative of the growth assumptions.

    Your own way might be to simply model in terms of today’s cash by putting a low single digit growth rate (investment return – investment costs- inflation) on your pot plus future contributions.

    That doesn’t particularly help you with LTA (though you might assume that there will eventually be some inflationary growth allowed in the LTA level from its current freeze) in which case you need to model an overall investment growth rate (less withdrawals once you can access) to determine if and when you’ll breach limits. That’s something I initially overlooked in my own modelling because though you might be below LTA when you start drawing at say 57 you can still be above it at 75 if you don’t draw enough (Though having 1m+ at age 75 might be a win for many of us anyway so what’s a further tax raid?)

  • 44 ermine December 2, 2021, 2:17 pm

    > those soles just wear down with the miles

    I found that too. My working self had two pairs, one light and one heavy walking boots for 10 years. As a retiree I get get about a year and a half, even after going upmarket. I don’t think you get better sole wear for more money, but I can go longer before getting aching feet if I spend more, and that’s something worth paying for IMO. That high wear rate jarred me off the first time, but I can’t say that a new pair of decent walking shoes a year is a major running cost.

    In general once retired I found that paying more for better quality is the way I want to go. There’s too much plastic rubbish from China in the marketplace, and it’s often really tough to qualify what is good and what isn’t before purchase. I used to try and live with that, but now if I have a rubbish tool and it fails I throw it out right away. Like a B&D mains power drill that sheared the plastic gearbox FFS – firstly I shouldn’t be able to stall a mains drill holding it with only one hand, I am not a 20yo bodybuilder, and secondly there should be a cutout if so. You use a mains drill for superior grunt. The B&D mains drill I inherited from my Dad lasted me 30 years, this one five.

    I’d say if ‘normal’ times return the holiday sked in that study is a little bit light too. OTOH perhaps it is OK integrated over say a 30 year retirement, observation shows people do slow down as time passes.

  • 45 Whettam December 2, 2021, 2:35 pm

    I think your current spending is the best starting point. The actual spending priorities will be a very personal thing. I plan to continue living somewhere rural and I think two cars for the first 20 years or so of retirement will be essential, I’m not seeing any budget in the comfortable band for dogs (which are essential fir me):
    https://monevator.com/can-dogs-and-financial-independence-go-together/, I’m relaxed about the number of holidays, but we eat out a lot and spend more than £8 on a bottle of wine, my wife just laughed at the comfortable price for a cut and colour, but since the pandemic I have done mine with beard trimmers 😉

  • 46 Al Cam December 2, 2021, 2:44 pm

    Clearly the studies have different strengths and weaknesses – and they resonate very differently with the variety of Monevator readers. However, what does seem to be absent from all of the studies is any acknowledgement that expenditure tends to change (on average it reduces) with age.

  • 47 Rosario December 2, 2021, 3:11 pm

    @ ZX – absolutely agree regarding travel. Flexibility and ability to travel at short notice, for varying amounts of time and at unpopular times (especially out of season or even mid-week) can reduce travel costs to 20-30% of those at peak. Or at least it did preCovid.

    @Al Cam – agree on the changing expenditure with age. All the studies tend to talk about the “golden period” from retirement to the start of one slowing down. There’s often then a period of lower cost when the person doesn’t go out all that often and certain expenditure (travel) almost dries up. Sometime there’s then a shorter period where it can stop altogether but this can also come with an increase in care costs.
    I’ve seen it in both my grandparents and parents. Each phase seems to last 5-15 years depending on the age at retirement, health and of course the type of person. I’m yet to see this reflected in any type of study.

  • 48 Al Cam December 2, 2021, 4:04 pm

    There are several studies that make this point.
    Two of the better known ones from the US are authored by Blanchett (True Cost of Retirement) and Banerjee’s: Change in Household Spending After Retirement: Results from a Longitudinal Sample.
    Several UK studies also make this point, including, from 2015: https://ilcuk.org.uk/wp-content/uploads/2018/10/Understanding-Retirement-Journeys.pdf

  • 49 Learner December 2, 2021, 4:09 pm

    Actually I take that back. The housing detail for even Minimum lists DIY and decorating, presuming _everyone_ owns their home. Renters don’t exist. Double yikes.

  • 50 Al Cam December 2, 2021, 4:15 pm

    Re #48:
    This post – from the late great Dirk Cotton – gives a very clear explanation of what David Blanchett called (IMO unfortunately) the “spending smile”. The reason DC’s post is so useful is that DBs paper is very often misunderstood as saying spending follows a [somewhat more traditional] U shape:

  • 51 Learner December 2, 2021, 4:16 pm

    The maximum seems to be $3900/mo or ~47k and that’s before tax. Perhaps @Dazzle means for a couple both getting the max and after tax? Or is including a state or fed pension.

  • 52 Gadgetmind December 2, 2021, 6:16 pm

    As others have said, some of this spending sounds lavish but other stuff cautious. We spend *way* more on food and booze from the shops (cooking from basic ingredients as ready meals are well worth avoiding IMO) but much less on takeaways. Our after tax (not including council tax and VAT) retirement income is above the London couple comfortable but we spend on different things. We don’t buy new cars. We are just replacing our 50+ year old cooker, but the 20 yo kitchen it’s in is just having a swap of drawer/cupboard hardware, and I’m doing the work with carcasses and doors being retained as solid hardwood. £1500pa on clothing and footware is madness. Each to their own, and having the income at least gives you the choices.

  • 53 Mr Optimistic December 3, 2021, 10:58 am

    I have never been a fan of expenditure budgets. They times I tried it led me to think someone was stealing from my wallet which told me I was far from capturing everything, probably the myriad cups of coffee.
    So I defaulted to looking at the current account and over a few months that should show expenditure relative to current income.
    If you are still working that should give a starting point to which you can apply deltas ( including counting pension contributions back in).
    We also put as much as we can on a credit card, the monthly bill for this gives the maority of discretionary spending. Subscriptions, direct debits etc of course have to be added but at least this captures the ancillary stuff including phantom coffees.
    The idea that 3 cans of beer a week was reasonable made me smile. A day maybe but even then I’d have to cut back…..

  • Mogul
    54 The Accumulator December 3, 2021, 1:49 pm

    @ Weenie – Your parents declining spend pattern is well supported by empirical studies as noted by @ Rosario and @ Al Cam. I’m gonna tackle the evidence for that in a couple of upcoming posts.

    As for the cougar boots… they sound almost unfair. Resistance is futile! 😉

    @ ZX and Naclue – yes, I felt the Comfortable lifestyle looks somehow disappointing. Slight better brands, slightly more cars. Spending money wisely on the things that really matter is missed by research like this. Money is an instrument. It can’t substitute for understanding what the good life really means to each and every one of us.

    I think this speaks to the points raised by @BBBobbins. By the time you retire, you need to have a good understanding of what makes you and any significant other tick. For example, as long as Mr Optimistic has lager he’s golden 😉

    @ Al Cam – cheers for the links as always.

    @ Miner – great point on life expectancy although I think you’d have to draw the right conclusions from any distribution curve. For example: there’s no reason you can’t live long and frugally with good genes and a willingness to OD on broccoli (while staying off the fags). Meanwhile, any of us can draw a short straw no matter what the trend line says.

    @ Tom A – these posts will hopefully help:


    @ Ducknald Don – LOL

  • 55 richard sorrell December 3, 2021, 6:35 pm

    Given everyone is different in terms of what they need to live the retirement life they want, only your current income can really be a guide to your future.
    Sure, remove mortgage costs, comuting, investments, child related costs etc. if they wont be a factor during your retirement and call that your revised income Personally I think I’ll need 100% of my revised income to have the standard of living I want in retirement.

  • 56 xxd09 December 4, 2021, 10:15 am

    As retirees of 75 -now slowing down with Covid and age my wife and I can agree with the previous poster that we needed the same income in retirement as when we were working to live the retirement lifestyle that we desired
    Lots of free time to fill and our travel budget plus hobbies more than filled the gap
    This was not what we were led to believe by pre retirement seminars
    Fortunately we had enough income and you could travel in those far off days!

  • 57 Limette December 4, 2021, 10:25 am

    This is very interesting! I‘m always curious to compare by how much I live under other people‘s expenditure.
    At £22k/year, I‘m enjoying an abundant lifestyle but that also includes rent. In London.
    And I cannot imagine owning my home in (early) retirement because, at current prices for what I see mostly as poor quality housing, I think of real estate as a money pit – unless it’s BTL.
    The state of the NHS worries me too and if it further deteriorates, might mean that I‘ll have to ‚go back where I came from‘. A chronic disease reared it’s ugly head again the other week and all I was worried about was the potential of having to seek urgent medical care because of it.

  • 58 Haphazard December 4, 2021, 11:29 am

    As usual looking at these things, I think: care home costs?
    I’ve seen older couples whose spending reduces when they get into more advanced old age and stop gallivanting about. That reduces your costs if you are just staying at home – possibly encouraged by covid. Fine if you can look after yourself. That’s how we like to imagine retirement, spurred on by the photos in pension brochures.
    But if you need a care home, possibly with nursing care, and you want one that isn’t hopelessly understaffed and basic, my understanding is the costs go up significantly – and all of a sudden very basic needs require luxury levels of cash. And if you are single, without family, the chances are you face higher care costs too. Nobody wants to talk about it because we prefer not to imagine our future selves as confused, frightened and incontinent. Apparently that’s why it’s so hard to get insurance – there’s no market.

  • 59 Tom-Baker Dr Who December 4, 2021, 4:21 pm

    @TA – Great post, as always.

    Like you, my spending choices are very different from the typical ones included in these surveys. People like us need to take these retirement expense numbers with a large pinch of salt!

    My approach to this problem of determining how much my wife and I are likely to need is very simple. First, we have got a clear idea of what is essential and that therefore must be provided whatever Mr Market decides to do. Then there are the nice to have things that you can reward yourself with if all goes well.

    As you mentioned many times in your posts, it helps a lot if many of the nice things/experiences you value are basically free or cost very little because other people don’t value them as much as you do. My wife and I often find that many of these consumer items some people pay small fortunes for, we wouldn’t want to own even for free as for us it would just be clutter or some other sort of nuisance.

    It’s wonderful that people are not all alike and have different interests and priorities, so that we don’t all need to compete for the very same things 😉

  • 60 old_eyes December 4, 2021, 6:01 pm

    I think these exercises set handy reference points you can flex to account for your own circumstances. It is no good arguing that these numbers are wrong. If they genuinely reflect where people put their money in retirement, then they are useful information points. We all have our points of difference – HOW much on takeaways and eating out!? That little on council tax? Lucky you! – but they serve as a reference point to work from.

    Personally, we spend a lot more on hobbies and interests and a lot less on clothes, but I still see the value of a crude broad grouping to help people think retirement through.

    As many have noted, the things missing are capital spending and health/social care costs. In our case, retirement more or less coincided with a heating system needing complete replacement and a car terminally failing its MOT (“well we can repair it, but do you really want to spend that much only to have the next thing fail in 12 months time?”). And it takes longer to rebuild your emergency cash stash after retirement.

    I also found the vox pops interesting. Again, not particularly my issues or solutions, but still interesting and a useful “have you thought about” checklist.

    So, a very interesting read. Thanks.

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