Pensions UK has updated its Retirement Living Standards – a set of benchmarks showing how much different retirement lifestyles cost in the UK, based on real household spending – to help highlight the growing cost of retirement for today’s pension savers.

The updated Retirement Living Standards show the cost of three different lifestyles:

• Minimum – around £13,900 a year for a one-person household and £22,500 for two people – covering basic needs
• Moderate – around £32,700 for one person and £45,400 for two – offering more security and flexibility
• Comfortable – around £45,400 for one person and £62,700 for two – allowing for more choice, travel and leisure

Rising costs for everyday essentials, such as food, bills and transport, mean the price of retirement is increasing.

And while many people (82%) may reach a basic level of income in later life, far fewer are on track to achieve a moderate (23%) or more comfortable (9%) standard.

The retirement members want may depend on the choices they make today

Many people could face a drop in income –and lifestyle – when they stop working, unless they act quickly.

So, it’s important to dedicate some time to planning ahead. The Retirement Living Standards provide a useful guideline for lifestyle costs but individuals’ costs and priorities may look very different.

Simple steps for members to check where they stand:

1. Work out what their target lifestyle might cost

   Members can use the Retirement Budgeting Calculator to build a picture of what their lifestyle might cost.

   It can help them:

   • think through their day-to-day expenses
   • factor in the things they enjoy
   • Consider any needs they have as an individual
   • Get a clear, realistic plan of the income they should aim for
2. Check what their pension could provide

   Once they know what they might need, it’s important to see how their pension compares.

   Members can:

   • Request an estimate of your retirement benefits from the Scheme
   • Use the Pension Planner (for active defined benefit members)
   • Use the DC Retirement Modeller (for members of the Industry-Wide Defined Contribution Section)

   These tools are all available when members log into their myRPS account. They can help build a picture of what members are on course to receive from their railways pension and whether there might be a gap. 

3. Act, if there’s a gap

   The good news is that even small steps can make a difference over time. 

   If they can, members might consider paying into Additional Voluntary Contributions (AVCs) or increasing their AVCs if they already make them. Saving a little more now could really help to boost their income later and give them more options in retirement.