The amount of money you need to save for a “basic” retirement has increased by almost 60 per cent in just three years, new research has revealed.
A study from the Resolution Foundation and the Living Wage Foundation has looked at the impact the cost-of-living crisis has had on the average worker’s ability to retire, concluding that it’s not good news for most.
The average pension pot needed for a basic standard of living in older age stood at £68,300 in 2020-21, but now it’s £107,800!
It comes as the Pensions and Lifetime Savings Association has released a new “retirement living standards” index to show what life in retirement looks like at three different levels, split across minimum, moderate and comfortable.
Earlier this year the organisation said the amount a single person needed to meet the minimum threshold had risen to £14,400 a year.
To get up to the moderate threshold would require about £31,300 a year, while the price for a comfortable standard of living in later life had climbed to £43,100 a year.
Katherine Chapman, the director of the Living Wage Foundation, said: “The news that workers now require a significantly larger pension pot to cover basic living costs in retirement will undoubtedly be alarming for many, particularly low-paid workers who have borne the brunt of rising prices over the past two years.”
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