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What your retirement could look like: retirement living standards in the UK

A sign that says “Old Age Ahead” as an analogy for thinking about future retirement living standards

Anyone planning for FIRE1 knows it’s hard to think about retirement living standards while you’re still having a blast in your 20s and 30s – or even when you’re neck-deep in your responsible 40s and 50s.

Like a precog from Minority Report, you can only glimpse fragments of your future.

Happily, intrepid retirees have sent us back reports from the frontier with enough detail to fill in the ‘Here Be Dragons’ gaps in your FI map.

The resultant research – Retirement Living Standards in the UK in 2023 – plots three tiers of retirement spending: from Minimal to Moderate to Comfortable.

The annually-updated paper also reveals what kind of retirement living standards such spending really gets you – from people who are already doing it.

Much ado about much more than nothing

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

Okay, maybe it’s only personal finance bloggers who get asked such questions at parties…

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).2

We’ll get to those in a minute. But a bonus of this research is it also includes 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. We learn something about what really matters – and as ever, the experience of others might help us find our own path.

Plus it’s interesting to read. There’s nowt so queer as folk!

Okay, let’s start with the hard data. After that we’ll move on to the fluffy anecdotal evidence.

Retirement living standards 2023: income targets

Source: PLSA

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

There’s also more granular detail on what you get for your money at each level. We’ll get to that shortly but – spoiler alert – the Minimum lifestyle isn’t factoring in many trips to Ayia Napa.

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

This makes it an interesting contrast with the UK median household disposable income3 of £32,300 as of the end of 2022, according to the most recent ONS data.

As for the median retired household income, that’s £26,300. Not much more than the Minimum spending level for couples in the 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 why we think there’s no need to fear the State Pension being done away with. The social fallout of scrapping it would be catastrophic for any government.

Solo sorrows

Another thing that leaps out from the table is life is expensive 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 them healthy. Give flowers, not chocolate. (But maybe think twice before buying them a Peloton.)

What you get for your money

To understand the life of Riley promised by the table, feast your eyes on this:

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

For example, I struggle to imagine life without a car. However I don’t personally need a fancy two weeks in the Med every year.

Also, I 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.

Retiree vox pops

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

The participants discuss their lived experience for each major spending category. Like this, a portrait 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

The snapshot above shows the foodie living standard each income band affords.

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 uncovering are ways to enjoy life without throwing money at it. 

For instance, you can take turns hosting dinners with your friends, which keeps you all socially engaged – and hopefully well-fed – without the overheads of eating out.

Still, rampant inflation in recent years hasn’t helped on this score, either. As one woman told the study:

I don’t think it’s just so much taking people out, but it is having people to the house to cook for them… which you are spending quite a lot of money to then invite people round to, you know, feed five or six people which I would probably do once a month.

In my 20s I spent like The Comfortables on eating out. That was just how I lived the life.

Now I’m under-spending The Minimums and I’m happy with that.  

Housing spending

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

But today’s retirees aren’t sure the next generation will be so fortunate:

I think that it is probably reasonable now that they would own it but in ten years’ time perhaps they would be more likely to rent?

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

It’s creating generational divides that put social cohesion at risk – even as up-and-coming generations are still meant to bankroll the NHS, long-term care, State Pensions, and cleaning 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:

Lifestyles nowadays, people like myself got divorced a couple of times, I ended up on my own and … I live in rented. I have had houses and owned them in the past, but because of circumstances and stuff I don’t.

Divorce is often mentioned by readers in the Monevator comments as a third-party calamity. (Excuse me while I google ‘thoughtful gifts’.)

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

Body disposal etiquette

Being at an age where they’ve seen plenty of family and friends pass away, the study’s focus-grouped retirees are very pragmatic:

You could die with a million pounds but have your family got access to that million pounds to bury you?

Probably not because it has got to go through probate and solicitors so they might not have the £3K, £4K, £5K to bury you next week or in a fortnight’s time.

Pre-paid cremation plans are included in the Moderate and Comfortable budgets. The study’s interviewees were resolute that they didn’t want their loved ones having to foot the bill.

Mrs Accumulator is under instruction to pop me out with the bins. But 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

We all have teeth that get holes in them and eyes that go wonky, whatever our financial means.

So for dentistry, for example, each of the retirement living standards bands includes the cost of a check-up every six months and one treatment per year, such as a filling, as well as including the cost of replacing dentures every five years.

In an ominous sign of the times, contributors voiced fears about being able to rely on the State for medical treatment:

You need to be able to have money available in case you need [it] because you can’t rely on the NHS well unless you want to wait in pain for ten years or something.

Private healthcare is always a talking point for the study’s focus groups, but it apparently loomed extra large in 2023. It was not included in the retirement budgets this time – 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? Can we reduce the burden on the NHS by looking after ourselves more? (I mean by living healthier lifestyles that increase our chances of staving off chronic conditions.)

In any event, all the private health insurance in the world won’t save us from dying if we need urgent assistance but have to wait two days for an ambulance.

Moolah for manscaping 

At least if you’re hit by the proverbial bus, you might be more likely to have your best face on for it these days.

The various spending budgets have always included beauty treatments for women. But now there’s a budget for men too at the Moderate and Comfortable levels.

The researchers note:

“a shift in social norms and expectations and that, as one participant put it, ‘they like it all these men nowadays, they are all grooming themselves aren’t they?’.

The budget included for women covered the cost of beauty treatments, such as manicures and eyebrow threading.

However the focus groups suggested the budget for men could cover the cost of ‘grooming’ such as a shave at the barber or a facial massage, as well as, for example, occasional physiotherapy appointments or sports massages.

While some may despair of ever escaping from society’s expectations about personal appearance, at least it seems positive that:

…in general, groups talked about retirement now being a far more active period and as a consequence there should be a budget to cover these sorts of treatments.

Social and cultural participation

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:

It is really important for mental health and everything as well isn’t it? So you know even day classes or evening classes are everything. You don’t get much… I don’t think you get much less if you’re retired.

Interestingly this budget area hasn’t increased much over time. Perhaps that reflects more flexibility is possible within this category? Gym memberships can give way to running shoes and walking boots, for example.

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 this respect? Let me know who I’m missing in the comments.

Tech tock

The social participation category also includes spending on technology – an ever-changing hit to our (increasingly digital) wallets.

DVD players are long gone, obviously. But streaming services are now considered an essential at every income level:

I was going to say it is for your mental health well-being as well, socially included because if you’re not able to watch Netflix you know a small series like that, I just feel that is you socially excluded as well.

Even Minimums now get a smart TV. Moderates and Comfortables get a better smart TV.

(We were warned against this escalation in the movie Trainspotting. Perhaps not the best source of retirement advice, but prescient.)

Interestingly, ‘cleverer’ home technology such as smart speakers and passive cameras is starting to creep into the budgets and anecdotes as more of a necessity.

One participant explained why she’d sorted out a smart speaker for her father:

A couple of months ago he did fall and had we set up in time he would have been able to call one of us because he couldn’t reach his mobile phone.

You can ask Alexa to phone so they are a good feature on that so they’re well worth the money to be honest.

This rings true: I have known pensioners with chronic health issues who love their smart speaker’s simplicity. They are also greatly reassured that they can use it to call for help.

The retirement living standards of tomorrow’s world

Every spending category gets a smartphone these days. If nothing else it’s a bit of brain training!

I say this with my tongue in cheek, after watching many a Boomer over the years staring at a smartphone for the first time like a caveman facing a mortgage loan application. 

How long before the new Apple Vision Pro sneaks into the highest spending band and works its way through the income levels?

At well over £3,000 a pop… if you enjoy keeping up with technology trends and you aren’t keen on trade-offs, you’ll need to be a Comfortable spender at least.

“Hello Future Me”

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

Making it even harder is that friendship groups tend to be intra-generational. I know more about the trials of my elders via Monevator readers 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? Please do flesh out the picture for all of us in the comments below.

Take it steady,

The Accumulator

P.S. We’ve completely updated the numbers, commentary, and quotes above for the latest 2023 figures. Some comments below may refer to 2021’s figures. Others offer a timeless perspective, so do dig in!

  1. Financial Independence Retire Early. []
  2. 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 commission research from Loughborough University’s Centre for Research in Social Policy. []
  3. Disposable income is what’s left after direct taxes, such as Income Tax, National Insurance, and Council Tax. []
{ 106 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…..

  • 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.

  • 61 Fudgecat February 9, 2024, 10:55 am

    Since retiring we spend much more on theatre visits and memberships to various groups. We also spend a lot on our grandchildren and the cost of commuting to look after them! We retired to a small rural village where takeouts can not be delivered and collection is a 12 mile round trip! That keeps the indulgence down… On paper, we could never have afforded to retire early. In actuality, a preference for a modest rural lifestyle and a lot of hard graft on a doer upper ( 7 years and counting! ) means we have been fine – so far… Heading for our 70s now, so I doubt the money will run out.

  • 62 Great expectations February 9, 2024, 11:23 am

    Gee, I dunno.

    The ‘comfortable’ scenario reads more like a minimum to me, a basic standard of living you’d expect in any developed country.

    The UK really is a tragedy of low expectations.

  • 63 Andrew Leicester February 9, 2024, 11:32 am

    I’ve not read the detail so perhaps it’s a bit unfair to comment, but I do know the Which figures (which I’ve used as a guide since I retired) are closer to the mark for my situation.
    And when I saw the odd figure – like mobile phone costs ranging from £10-£30 per month – I decided not to be too concerned by the high topline figures. FYI – I pay £4.75 per month for 2GB a month and it suits my needs (no contract, bought brand new Samsung A14 for £168 as my previous one died).
    I suppose it’s for each individual to decide how much of this to take on board, but I have a comfortable lifestyle on less than those figures quoted.

  • 64 Andrew Leicester February 9, 2024, 11:35 am

    @Great Expectations – considering the median income is around £35k before tax I’d suggest you will be in the minority with your views.

  • 65 ermine February 9, 2024, 11:55 am

    On a technicality, this is just plain wrong

    You could die with a million pounds but have your family got access to that million pounds to bury you?

    Probably not because it has got to go through probate and solicitors so they might not have the £3K, £4K, £5K to bury you next week or in a fortnight’s time.

    You do not have to go through probate to get funeral expenses. You take the invoice from the funeral director to one of the banks with an account held by the deceased and present that along with the death certificate. Do not buy funeral insurance if you are solvent. Just hold enough in a savings account and instructions to the executor as to what to do. Funeral insurance plans are terrible value comparatively, and expose you to counterparty risk as well as being inflexible – like all services the cost increases with time, which if you bought your plan 20 years before cashing in your chips may end up falling well short.

    So yes, in the case of that respondent, the family would most likely have access to enough of that million pounds to bury you in a week or a fortnight. These insurance schemes prey on an unpleasant mischaracterisation of the legal position in the UK. A simple savings account held in the deceased’s sole name is a better equivalent, and the bank will issue a banker’s draft payable directly to the funeral directors, so the family member arranging the funeral does not have to have it going through their account.

  • 66 RAMMY February 9, 2024, 12:10 pm

    Steveark based in the USA, mentioned he will receive $72K in social security.
    Equivalent to £57K based in today’s exchange rate.
    I have relatives in the USA who receive similar payouts and cannot believe the pension peanuts we receive in the UK after a lifetime of work.
    The UK is a very poor country with a very low standard of living.

  • 67 Peter February 9, 2024, 12:22 pm

    I am tracking my spending for the last three years in detail. Through entire 2023 I have spent £15.5k. This includes 2 holiday abroad (each for two weeks), £3k gaming PC and £1k bookshelf speakers.

    I don’t have a car (don’t even have a driving licence). I don’t have children but I do have a mortgage to pay.

    I feel, this £16k made 2023 pretty luxurious for me. So when I read that £14k is considered as minimal standards it is a hard for me to believe.

    On retirement and politics:

    The fact that it was even suggested state pension age will need to move until we are 71yo in the future, is disgusting. Worth remembering that this would also mean minimum age to access your SIPP would move to 61yo.

    The fact there was no French revolution on the streets after suggestion about new state pension age being moved to 71yo is just sad. People complacency in UK is on another level.

  • 68 The Investor February 9, 2024, 12:33 pm

    @RAMMY — One difference between the UK and the US is that State retirement benefits in the US are based partly on lifetime salary (and hence contributions) whereas our full state pension maxes out at £10,600.

    No argument that the UK is a relatively poor country among developed peers though — and, as some readers hate being reminded, we’ve deliberately made ourselves poorer over the past decade.

    It’s not a pretty picture. If I was 30 and had career opportunities overseas, I’d seriously consider taking them for this reason alone. Not impossible I will anyway.

  • 69 Pinkney February 9, 2024, 12:48 pm

    In addition to Ermines comment you can also get access to quite a bit of money without probate. Banks will usually release money up to a certain threshold without requiring a grant of probate, but each financial institution has their own limit that determines whether or not probate is needed. For example lots of the major banks have 50k as the threshold so that covers funeral expenses easily. So just tell your loved ones to keep a bit of cash in a simple cash account under the threshold some instutions say 10k some 5k some 50k so just have a little check around.

  • 70 dearieme February 9, 2024, 1:14 pm

    We’ve just spent £40k on a new roof.

    We are wondering whether it could be worthwhile to install a lift (not a stair-lift) in the house but we have no idea what that would cost. How much longer would it let us live here? Are we going to have to pay for carers if we are to stay here?

    Still, we don’t splurge on clothes, takeaways, meals out, cars, or hols sur le Continong. It’s vexing that neither of us is fit enough to continue cycling.

  • 71 trufflehunt February 9, 2024, 1:15 pm

    Re:.. “.. Probably not because it has got to go through probate and solicitors so they might not have the £3K, £4K, £5K to bury you next week or in a fortnight’s time..”.

    Fair enough. But surely one of the relatives would have a large freezer.

  • 72 Larsen February 9, 2024, 1:29 pm

    It’s very hard to see where the figures in this study come from based on our experience, at least in terms of what can be afforded. I track expenses by tax year and for the 10 months to the end of January 24 we (couple with independent children living elsewhere, paid off house, 1 car) spent 22.1k, but that includes 4.5k of discretionary travel, including 1 long haul trip as well as 2 local breaks, 2.3k of family support and 2k charity and gifts.

    So for not much more than the minimum level in the study we seem to be able to afford to do a good bit more. I think the principle of the study is worthwhile, but these figures were heavily featured in the news this week, and I’m sure they are offputting to some people in terms of retirement planning.

  • 73 Marco February 9, 2024, 1:32 pm

    I can’t get the figures for the comfortable lifestyle to add up. We take more holidays and have better cars and 2 young kids and I still don’t see us spending 60k a year. Where is the rest of the money going?

  • 74 CL February 9, 2024, 2:06 pm

    Very interesting! Are those PLSA figure pre or post tax?

  • 75 weenie February 9, 2024, 2:26 pm

    Further to my comment #20, just wow, that’s a big jump in numbers! I think I will continue to aim for the Moderate category (back when it was around £24k), as I currently live quite comfortably on less than that.

  • 76 ermine February 9, 2024, 4:21 pm

    @CL they are post tax, which is rational given that these are spending budgets, and I have never found a good way of spending pre-tax money without getting into hot water 😉

  • 77 Dawn February 9, 2024, 5:24 pm

    The new numbers have floored me abit..my income of 24k puts me in medium category . I live pretty well off that singe female. own my own little house and car lots of hols abroad but they are now saying I need 31k . Its all just general though. Each individual case is different.

  • 78 Rhino February 9, 2024, 5:45 pm

    @Marco – absolutely agree. I spend a ton more money on the categories and do a ton more things than in that table to cover a family of four and spend about the same as a couple/comfortable. Something very odd going on..

  • 79 The Investor February 9, 2024, 6:07 pm

    @Rhino @Marco — Care to share your monthly/annual budgets here? With accurate line item detail? It’s anonymous after all.

    My experience is most people underestimate what they spend, which is why so many personal finance gurus suggest doing a budget and tracking everything. (I don’t but I lived like a swanky monk for decades haha. And I’m still ‘out of sample’ I think).

    Of course you may already do this and your budget perceptions may be spot-on, but at the moment we have a systematic academic study versus Internet commenter anecdote, so I think it’d be helpful to everyone if we could resolve it. 🙂

  • 80 Rhino February 9, 2024, 6:41 pm

    Haha yes, been tracking/categorising every transaction for well over a decade. So it’s definitely not an underestimating issue! Possibly it is a rent/mortgage thing? What was the assumption there for the pensioner?

  • 81 The Investor February 9, 2024, 6:47 pm

    @Rhino — I believe they assume the mortgage is paid off on their own home. By the way the link to the full paper (with more detail) is in the article under the long title, so all the answer might be in there.

    My life is so divergent, I’ve no idea what normal is, so seems a bit futile me digging in. 🙂

  • 82 Rhino February 9, 2024, 7:13 pm

    OK, I guess your point on anonymity is fair so not much to lose by sharing.

    We could use my FY ending 2023 as an example?

    I was thinking if I just present categories of interest (the big ticket ones), rounded to nearest £100 to keep it simple if that’s ok with everyone?

    Note its not going to sum to total cleanly as I haven’t included all the categories as some are titchy and a bit pointless.

    Gas/Elec = 1400
    Water = 500
    Council Tax = 3500
    Diesel = 1200
    Going Out = 2300
    Sports = 1000
    Holidays = 9900
    Groceries = 8100
    Kids = 4000

    Total spend = 35500

    So that’s a family of four. Haven’t included mortgage payments as I’m only using mortgage as a means to leverage the portfolio so it doesn’t seem appropriate to count it as an expense. In that sense, my situation is similar to the pensioners, i.e. no rent/mortgage.

    One thing that is possibly unusual is I didn’t spend much on house that year. They can be large lumpy costs when they do happen.

    Hope that helps!

  • 83 The Investor February 9, 2024, 7:41 pm

    @Rhino — Thanks. You don’t buy clothes? You don’t buy/use computers and other technology? You never buy a car? 😉

    I can’t really argue (and don’t have a dog in the race anyway, exactly) if you’ve kept rigorous budgets of course.

  • 84 Rhino February 9, 2024, 8:05 pm

    @TI – yes these are all fair questions. I did actually buy a car in 2021 which was the first one ever at a cost of 14000 (all other cars have been bangers that were dumped on me by family members). On the clothes front, I am ludicrous and barely buy any, to put that into context, I spent 35 on clothes in that FY above. Kids clothes are inc. in the 4000. I do have a really nice lenovo thinkpad which I purchased 2nd hand in 2020 for £400. The previous laptop was about a decade prior, again about £400 so the tech category is not really worth mentioning.

    I think I’m spending more on holidays and groceries than those pensioners though?

  • 85 Peter Rabbit February 9, 2024, 8:15 pm

    I agree with the other commenters about these seeming like overestimates. I spend considerably less than the “minimum” for a single person and feel quite comfortable. (With rent taken off, taken to be £3.7k/yr for median social rent.)

  • 86 Jonty February 9, 2024, 8:23 pm

    Having looked at it I find that most of it seems to be rubbish as many have said – even back in 2021.

    As ZX and others stated back then, where do they get these surveys from?Who wants to retire on the “comfortable lifestyle plan” and only get one fortnight abroad (in the Med apparently) a year. I would have thought most would want at least that on just a basic lifestyle. At the top end I’d probably want a fair few. Many retirees I know spend a few months abroad in EU – although sadly many now not as much thanks to brexit rules.

    They tell us most people dream of retiring to be able to travel more – not less. They tell us it’s more about experiences (or latest buzzword: making memories) and not just buying more material stuff – cars/clothes/stuff for house that make most happy in retirement. None of these groups are gonna be very happy then. Okay so maybe not absolutely everyone likes travel, TA included, but the majority of early retirees who are in good health probably would – it always seems to come top of the retirement wishes of those I know in that age group and in most surveys I’ve seen in my lifetime. Also with covid/brexit wrecking it over the last few years, for many somewhat with limited travel/increasing cost, I would think it would be high up there again now even though costs remain higher/availability less than before.

    So subscription streaming services is apparently way up there is it?? Isn’t the case for me – there is enough “trash” on mainstream without paying for more and I don’t wanna be paying the fortunes of overpaid/underworked/self obsessed/egotistical actors, actresses and other supposed celebrity types – the types you see on Graham Norton -all back slapping each other – there are enough of them already.

  • 87 The Investor February 9, 2024, 8:41 pm

    I don’t really want to die on the mountain of defending this report, as I have no special insight into it and as I keep saying my own life-cycle spending looks like a printer failure on the aggregate lifecycle graph.

    But I have to be honest: this pushback reminds me a bit of when people decry the inflation basket because their favourite brand of crisps isn’t in there or because somebody else’s tennis racket is.

    As I understand it they’ve surveyed a large number of people — in person too — and they’ve done it multiple times, so one would hope have some expertise in it. Perhaps I’ll try and have a deeper look into the data if I get a moment.

    The counter to my own argument is the PLSA that sponsors the report is an industry body. Clearly the finance industry has a vested interest in us deferring as much spending as possible now to save/invest for the (apparently) higher spending required in the future, so that they can take a tithe on it along the way.

    So I don’t doubt which way they’d lean in edge cases.

    However I think we need to be circumspect about writing the whole thing off without a bit more rigour, personally. (E.g. @Rhino leaving off his £14K car, though I do genuinely appreciate him sharing. Also little trivial seeming things add up!)

  • 88 Rhino February 9, 2024, 9:09 pm

    Haha, funnily enough I’m also in the process of buying a tennis racket. It’s a right old rabbit hole. I also purchased a bathroom this FY at about 10k 😉

  • 89 ermine February 9, 2024, 9:48 pm

    > they’ve surveyed a large number of people

    135 participants took part in 14 discussion groups between January and May 2023 (page 4)

    Enough to tell a good story, perhaps not enough to capture the variation across 28 million households IRL. I know a few people above have said Britain is a poor country nowadays, but the logic of medium level retirees needing more than the median UK household pretax income surely shows that something is off somewhere? Particularly as that median household is mostly still working and paying off a mortgage.

  • 90 The Investor February 9, 2024, 10:16 pm

    @ermine — Fair point. I suppose the gulf might simply be between what they need, what they want, and what they get?

    @Rhino — Tsk! 😉

  • 91 Marco February 9, 2024, 10:22 pm

    To be fair I don’t really track my expenses well but monthly credit card spend varies between 2 – 4k. I have taken my eye off the spending ball as my family is FI but I’m still working for at least another 5 – 10 years. I still can’t see us ever spending 60k. We went on 5 family holidays last year, including 2 to 5 star hotels in the canaries and one to the home of Lego in Denmark, and spent around 8k (although major shoutout to my wife who finds the good deals).

  • 92 Ben February 10, 2024, 8:46 am

    The PLSA income targets show what you’d need to retire now. But if you’re planning to retire at some point in the future, factor in core inflation stuck stubbornly at 5.2%. You’ll need double the PLSA income if you retire in 14 years, for example. A couple retiring in 2038 would need £118,000. That’s after tax.

    The UK is heading into a pensions disaster. A lot people in my generation (gen x) put all their money into property and completely forgot about pensions. State pension age will have to rise as the population ages. Being able to retire comfortably is going to become rare.

  • 93 The Investor February 10, 2024, 9:14 am

    Further to the pondering of whether these income requirements are excessive, I have just been looking at equivalent estimates from Which?.


    Again, three bands of living standard spending requirements are offered, with annual estimates for retired couples in this case put at: £19,000, £28,000, and £44,000 respectively.

    Even allowing for a bit of inflation since then (they from March 2023) they’re significantly lower.

    So maybe the PLSA ones are a bit frothy?

  • 94 Maj February 10, 2024, 10:21 am

    My own experience tells me that the Which ? figures are closer to reality. However, much depends upon lifestyle, location and personal circumstances.
    One thing I would add is that “health” needs to include ever-increasing costs of dentistry.
    The current severe shortage of NHS dentists means going private or not going at all.
    And private dental treatment ain’t cheap for old teeth.

  • 95 Ben February 10, 2024, 11:10 am

    I agree that the Which figures are more accurate. The PLSA figures were obtained from group discussions with a mix of retired and unretired people, all of whom were asked to imagine what people in the various categories needed. The Which figures came from a more straightforward survey of retired people asking them to give their own expenses. The latter seems less prone to error.

  • 96 Paul_a38 February 10, 2024, 4:36 pm

    For reference my wife and I got our state pension forecast for 2024 (April 10 onwards) and in total for both its £24200 per annum.

  • 97 Martin T February 10, 2024, 5:44 pm

    The Which and PLSA figures are relatively close for the minimum amount required; where they diverge is on how much discretionary spending is needed to become ‘comfortable’, much of which is in the eye of the beholder. Those who are fortunate enough to be able to make these choices should be grateful, however much we may believe it is due to our skill as investors, or thrift in managing our affairs, and perhaps spare a thought for those who are not – for a single person, the minimum is above state pension level.

  • 98 Keep it simple February 10, 2024, 10:07 pm

    On the basis that comparison is the thief of joy ( can’t remember who to attribute that to). Isn’t it better to track your own personal expenditure for a few years, apply some considered judgment to how that might vary as you progress through various life stages, than over think academic(esk) studies?

    That said I’ve thoroughly enjoyed the comments on this post!

    Thanks all

  • 99 Rhino February 11, 2024, 9:30 am

    @KIS – comparison is the thief of joy only when you come off worse, and schadenfreude can be a real pick-me-up in times of need. This article is great in that respect because I can see that if I hit the income numbers mentioned I can get a massive amount more bang for my buck than what’s listed. Particularly on the holiday front. That’s cheered me up no end!
    And for sure, you would have to prise expense tracking out of my cold, dead hands – its a fundamental of personal finance. You can’t really do any other subsequent planning without it.
    It’s a bit of a tenuous segue, but my prior lament on the demise of money dashboard hasn’t been as bad as all that as moneyhub is actually just as good, if not better. The ability to categorise a few transactions via the app when you have a spare moment on your phone is really handy. Then come the end of the month most of the work is already done.

  • 100 David45 February 11, 2024, 10:40 am

    We retired 15 years ago.  In the early years of retirement (excluding bank of mum & dad outgoings) we were spending approx £45 – 50k pa.  This figure excludes ‘capital’ items like replacement car(s), new kitchen and the like, etc. (We totally renovated the house when we retired so house maintenance/replacement hasn’t been much since then).  Over the years this overall figure has slowly and naturally reduced. Our current ‘budget’ is £36k pa. In summary is: 
    18k – general expenditure (food, clothing, meals out)
    3k – two (aging) cars maintenance, insurance, petrol (15k miles pa) 
    3k – gas, electric, water
    3k – council tax
    2k – medical/dental (self insuring)
    2.5k – golf club subs + golf trips
    4.5k – holidays
    Any ‘capital’ expenditure would be additional to the above to be funded by savings/investments (approx 60% US & global trackers, 40% fixed deposits & gilts (btw, thanks for the ladder concept).

  • 101 ZXSpectrum48k February 11, 2024, 12:43 pm

    I think people do need to bear in mind that since end 2020, the UK CPIH index is 20% higher. What was £50k is now £60k.

    Nonetheless, PLSA and Which measure different things. Which proxies the spending reality. PLSA proxies for the expectation. At the higher end, the expectations vs reality gap is about a third.

    This reinforces my view that what is considered “comfortable/luxurious” tends to drift higher. Post WW2, people expect to be able to afford a higher standard of living as each year passes. Plus people now have the ability to compare their lifestyle not just with the person in the same town but at a global level. Just by looking on Instafake/Facelies etc. Hence why I’m sceptical that CPI-based adjustments are a good proxy for spending in SWR-type analyses. People don’t accept a stagnant standard of living.

  • 102 Rhino February 11, 2024, 1:30 pm

    @ZX – it’s a good point and you could imagine that being one of the headings pulled out in the analysis, i.e. the devastation that inflation can cause. The nature of the article updates overwrites that takeaway unfortunately unless you want to trawl through the comments to try and piece it together.
    That said hedonic adaption (in so much a lack of it) is a key tenet of FIRE, so you don’t necessarily have to succumb, especially if you’re actually aware of it, but I do agree that it’s a thing.

  • 103 Gary C February 11, 2024, 2:59 pm

    late 50’s and in second year of retirement.

    I don’t think you can pin numbers on retirement so easily.
    I budget for most things but find clothing, toiletries and household goods hard to put a figure on.

    Currently I am spending @52k pa, but this does includes 12 weeks abroad
    Mexico-Egypt-5stans-Thailand & India (month in each so far).
    I would expect my travelling to slow down or become less exotic as I near my 70’s.
    I also buy a new car every 3-4 years but ideally self driving taxi’s will be in the near future which will enable me to dispose of the need for a car..

    But it has been a 20 year plan to reach early retirement and give thanks to monevator and other bloggers-you tubers that have kept me on the passive route.


  • 104 The Investor February 11, 2024, 3:38 pm

    @Rhino @ZXSpectrum48K — Perhaps we could add a table with the next update collating the past few years’ figures so people could get a sense of how rapidly spending/expectations can advance. Of course inflation may quiet down again, but having a spike in the history captured might be even more valuable in the future then.

    I think if I remember with the next update I/TA might included Which’s figures in the piece too.

    The point about reality versus expectation is well made, and worth flagging up to readers at large next time! 🙂

  • 105 Maj February 11, 2024, 5:05 pm

    Coming back to this; An IFA mate told me years ago that when folk retire, they spend in their fifties/sixties and begin to slow the spending down when in their seventies. He was right.
    We retired almost 21 years ago. For the first ten years or so, we travelled widely, replaced cars, helped children out.
    The following years we spent money on the house; new roof, kitchen, boiler, insulation, replaced driveway, had the garden made more age-friendly. There’s more, but you’ll fall asleep with boredom if I list everything.
    Now in our early seventies, we tend to spend less just because we’ve already done most of it.
    Our current reality is that we can live comfortably on our pension income.
    With enough (hopefully) in the reserve pot to cover large one-off and emergency expenses.

  • 106 Curlew February 11, 2024, 9:14 pm

    @ZX et al
    “Hence why I’m sceptical that CPI-based adjustments are a good proxy for spending in SWR-type analyses.”
    But wouldn’t you expect CPI to lag behind hedonic adaptation? For the arbiters of the basket of goods that comprise CPI, I would presume they have to be somewhat cautious/conservative in making changes for the somewhat obvious reason of continuity of comparison.

    My reading of the PLSA report is that it includes such things as Netflix subscriptions and Alexa-type devices but presumably such novel items need to establish themselves over a sufficient period of years before they will be incorporated into the general-purpose inflation indices. Personally, I’m distraught that they never included my Sinclair C5 in the basket. 🙂

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