The cost of the minimum retirement lifestyle dropped over the last year on the back of lower energy costs and changes in the public’s expectations.
This was the finding of a new report by the Pensions and Lifetime Savings Association (PLSA), which shows that the minimum retirement lifestyle is now £21,600 per year for a two-person household.
For a one-person household, this has decreased by £1,000 per year to £13,400.
Calculated by the Centre for Research in Social Policy at Loughborough University on behalf of the PLSA, the Retirement Living Standards report describes the cost of three different retirement lifestyles: Minimum, Moderate, and Comfortable. The research is based on multiple in-depth discussion groups with members of the public from across the UK.
The data shows that across all retirement living standards, the weekly domestic fuel budgets have fallen by more than a quarter since the 2023/2024 RLS update:
- For a two-person household at the Minimum, the fuel budget has fallen by £12.44 per week, making up a significant part of the total decrease.
- For one-person households, the drop is £8.82 per week.
- At the Moderate and Comfortable levels, energy costs are also lower, falling by £16.74 and £15.38 per week respectively for two- and one-person households.
Research discussion groups for the Minimum standard also reported some small changes in what they need for a minimum standard of living, clothing, hairdressing, technology purchases, taxi use, and charitable giving.
However, participants agreed that the budget for rail travel would need to rise, reflecting higher rail fares and a need to travel further by rail, with annual rail fare budgets rising from £100 to £180 per person.
A recent PLSA survey found that most people today already live with others:
- 75% live with a member of their family (spouse, children, parents, other relatives);
- Just 22% live alone;
- 3% say they live with someone other than a family member
And when looking ahead to retirement; - 77% of non-retired people expect to live with someone else in retirement;
- Only 23% of non-retired people expect to live alone.
The role of the State Pension also remains vital, particularly for those at the Minimum level. A two-person household who are both in receipt of a full new State Pension (worth £11,973 per person, or £23,946 combined in 2025/26) will be able to meet the costs of the Minimum Standard.
Importantly, when asked who they’d be willing to live with in retirement to help share costs like housing and bills, only 12% of people said ‘nobody’ and wanted to live alone. This shows widespread openness to shared living, including the possibility of roommates and house shares, the PLSA said.
“We’re not just seeing changes in costs, we’re seeing changes in how retirees live. Retirement isn’t a one-size-fits-all experience. The Standards recognise that retirees can share costs, often with a partner, and that can make a huge difference to affordability in later life,” said Zoe Alexander (Director of Policy and Advocacy at the Pensions and Lifetime Savings Association).
“For many, retirement is about maintaining the life they already have, not living more extravagantly or cutting back to the bare essentials. The Standards are designed to help people picture that future and plan in a way that works for them.”
Leave a Reply