How Much Do You Need to Retire?

Posted on 2 Sep 2025

Steve is a Rochdale-based Financial Adviser and Director of Front Row Financial who will be providing financial insights for the RDA’s Finance Lens, this month we will be exploring “What’s the cost of a comfortable retirement?”.

How Much Do You Need to Retire?

From 50, many begin to focus on pension planning. With inflation and changing interest rates, the cost of a comfortable retirement is rising, making it essential to know your target and whether funds will come from a pension(s), savings or other sources like rental income.

PLSA Retirement Living Standards

The Pensions and Lifetime Savings Association (PLSA1) defines three retirement lifestyles:

- Minimum – Covers basic needs: UK holidays, occasional meals out, £450/year on clothes, but no car.
- Single: £13,400/year | Couple: £21,600/year

- Moderate – Adds financial security: 2-week European holiday, a small car, dining out a few times a month.
- Single: £31,700/year | Couple: £43,900/year

- Comfortable – Includes luxuries: regular beauty treatments, theatre trips, multiple European breaks.
- Single: £43,900/year | Couple: £60,000/year

Figures (updated June 2025) have risen over the past year and may increase further.

Funding a Comfortable Retirement

Even with the 2025/26 full State Pension (£11,973/year), there’s a shortfall for all but the minimum lifestyle.

To achieve a comfortable standard, the PLSA estimates a pension pot of £540,000–£800,000 for a single person (if buying an annuity).

Why Planning Matters

- Start early – The sooner you save, the less you’ll need to contribute later.

- Sole traders and Company Owners should prioritise retirement planning as early as possible

- Boost contributions – Consider Additional Voluntary Contributions (AVCs) to workplace pensions, making the most of employer matching.

- Set clear goals – Holidays, hobbies, and visits to family can motivate regular saving.

- Seek advice – Choosing how to access your pension (and managing tax) can be complex.

The good news is most people with the full State Pension and a workplace pension should meet the minimum standard from State Pension age, but reaching moderate or comfortable levels requires proactive planning.

Retirement planning isn’t just about numbers - it’s about funding the lifestyle you want. The earlier you start, the more control you’ll have over some of the best years of your life.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

Front Row Financial Ltd is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group’s wealth management products and services, more details of which are set out on the group’s website www.sjp.co.uk/products.

Retirement Living Standards, Pensions and Lifetime Savings Association, 2025. All figures quoted were developed by the Centre for Research in Social Policy at Loughborough University on behalf of the PLSA.

SJP Approved 18/8/2025

Article by Steve Worral and the team at Front Row Financial.

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