State pensioners require £691,000 in savings to achieve a comfortable retirement lifestyle, according to new research from wealth manager Quilter. The study indicates that an individual would need £413,000 for a moderate standard of living in retirement.
Pension savings gap highlighted
Jon Greer, Head of Retirement Policy at Quilter, emphasised the importance of the state pension but noted its limitations. "The Department for Work and Pensions State Pension still forms a crucial foundation and goes a long way towards helping people achieve a minimum standard of living; however, stepping up to a moderate or comfortable lifestyle requires significant pension savings," he said.
Greer added: "While most people are on track to cover the basics, far fewer are likely to achieve the level of flexibility and financial security many would aspire to." He also warned that factoring in housing costs could push the required income higher, making early planning and regular reviews even more important.
Annual spending requirements
For a comfortable standard of living, each partner needs a pension pot of £389,000, while a moderate lifestyle would require £208,000 each. The research sets annual spending for a comfortable retirement at £45,400, with £32,700 needed for moderate and £13,900 for minimum lifestyles. For couples with joint pots, annual spending is £62,700 for comfortable, £45,400 for moderate, and £22,500 for minimum levels.
Greer noted that the pension landscape has become "increasingly confusing" for savers, citing changes such as pensions being drawn into Inheritance Tax from 2027, salary sacrifice adjustments, and the threat of further reforms. Despite this, he stressed that pensions remain an efficient way to save, and these figures highlight the importance of taking ownership of savings.
Professor Matt Padley, Co-director of the Centre for Research in Social Policy at Loughborough University, commented: "The Retirement Living Standards continue to provide detailed descriptions of what the public agree everyone needs for a Minimum, Moderate and Comfortable standard of living. They are rooted in people's lived experience and reflect a shared understanding of expectations about life in retirement, shaped by the social, economic and political context of contemporary UK society. They provide a real-world starting point for individuals in thinking about the sort of retirement they want, what this might cost, and how they might get there."
