PLSA’s retirement living standards now cover 35mn members

Launched in 2019 and updated in 2021, the retirement living standards are meant to help savers determine the lifestyle they want in retirement and to understand the costs, dividing retirement standards into three broad categories: minimum, moderate and comfortable.

The PLSA estimates a single person would have to spend around £11,000 a year to achieve minimum living standards, rising to £21,000 a year for moderate, and £34,000 a year for comfortable living standards.

The associated figures for couples are £17,000, £31,000 and £50,000 respectively, though these are all due to be revised again in October to account for changing prices.

The PLSA said it hopes its standards will become a “rule of thumb” for retirement planning, and form part of a national conversation about the importance of pension saving.

It is encouraged that 124 organisations are now using the standards, including more than 100 pension schemes, with a further 25 schemes signalling their intent to use the standards in future.

The industry body estimates that this takes the number of members covered to around 35mn, more than double the 14mn reported in October 2020.

It cautions, however, that this could be an understatement, since the figure for the number of organisations using the standards has been derived from a combination of surveys and organisations self-declaring, and does not include the customers of non-pension scheme financial services companies.

The target is to have 90 per cent of active savers covered by 2025.

Nigel Peaple, director of policy and research at the PLSA, said: “It has been enormously encouraging to see so many pension and savings organisations proactively using the retirement living standards to help bring pension saving to life.

“Reaching up to 35mn savers, the retirement living standards are now firmly established as part of a common language to help people engage with pension saving and understand their spending needs in retirement.”