Every few months, somebody quotes you a number for what retirement costs and everybody nods because it sounds authoritative.
The Retirement Living Standards – updated in May – are that number.
Loughborough University’s Centre for Research in Social Policy produces them for the Pensions and Lifetime Savings Association, based on what the public agree three different lifestyles actually cost.
For a single retiree who owns their home outright, that’s roughly:
- £13,900 a year at “minimum”
- £32,600 at “moderate”
- £45,300 at “comfortable” – a couple wanting “comfortable” needs around £62,500
These figures move with the times. The year-on-year rise – 3.3% to 3.8% – tracked CPI inflation of 3.5% closely enough.
Look further back and the number gets more alarming: the moderate standard for a single retiree has climbed around 64.5% since 2019. That’s a genuinely useful anchor, far better than guessing at “enough.”
It’s also, on its own, close to useless for planning your savings because it isn’t answering that question.
Spending isn’t the same as income
Those figures are spending, quoted after tax, not income.
Pension income above your personal allowance is taxed like any other income, so the pot you need to generate that spending is bigger – sometimes substantially so.
Take the numbers at 2025/26 tax rates, where the personal allowance is £12,570, basic rate is 20% and higher rate is 40%. The gap opens up fast:
- £13,900 of minimum-standard spending needs about £14,200 of gross income – barely a difference, as you’re mostly within your allowance
- £32,600 of moderate spending needs roughly £37,600 gross
- And the comfortable figure – £45,300 net – actually required something closer to £54,600 before tax
Quote the net number to someone planning their savings and you’ve understated their target by close to £9,300 a year at the level most people are aiming for!
Three things the headline number hides
Housing, for one. The whole model assumes you own your home outright, with no rent or mortgage to pay. For plenty of people that assumption is already wrong, which is presumably why this year's research modelled private renting for the first time: a single renter in London needs about £32,089 a year just to scrape the minimum standard – more than double the figure for someone mortgage-free.
Then there's what "comfortable" actually means, because it was defined by committee and committees average things out. The basket includes a fixed allowance for household help; if your version of comfort involves a weekly cleaner, regular travel or helping your children onto the property ladder, the published figure has already stopped describing your life.
And the real gap: a spending benchmark was never a savings plan. None of these numbers tell you what pot you'd need, in real terms, to pay yourself that income for three decades. That calculation is the one that actually determines whether you retire comfortably or not.
My view
Benchmarks like these are a good starting point and a poor destination.
The question worth asking isn’t what the average comfortable retirement costs everyone else, but what yours costs, what you need to save to fund it and how much of that saving disappears into fees before it ever reaches you.
That’s the job Prosper exists to do. The money you set aside should work towards building your own retirement on your own terms, not for the chain of firms standing between you and it.
Capital at risk. The value of investments can go down as well as up and you may get back less than you invest.
This article is for informational purposes only and does not constitute personal financial advice. If you are unsure whether an investment is right for you, please seek regulated financial advice.
Sources: Retirement Living Standards, 2025 update, CRSP, Loughborough University, for the PLSA, May 2026; HM Revenue & Customs, Income Tax rates and allowances for 2025/26.