Pensions UK Report: Figures paint dire picture of nation’s saving

At a glance

• Pensions UK’s latest Retirement Living Standards (RLS) update shows the nation is not saving enough for retirement.
• Fewer than one in four (23%) are on track for a ‘moderate’ standard of living in retirement. This falls to just 9% on track for a ‘comfortable’ retirement^3.
• Increases in the cost of living, particularly food, energy and transport, have significantly pushed up the annual income required for a comfortable old age.

The amount of money needed for people to achieve a good standard of living in retirement has risen significantly in the last year.

Figures from trade body Pensions UK show a sharp increase in the annual income needed to support a ‘minimum, moderate, and comfortable’ retirement¹. This has been driven by the increased cost of living over the past year, particularly food prices, energy and transport*.

Millions of workers are not saving enough for retirement. Pensions UK warns that without action from government, employers and savers, too many people risk a cliff-edge drop in income when they stop work¹.

In 2025, the annual net income needed to support the minimum standard of living in retirement for a couple was £21,600. This has risen to £22,500 – a 4.2% increase.

For a couple, where both partners get the full state pension (£12,548 per person per year), this is achievable.

But the net income required for a single pensioner to achieve the same minimum standard of living has risen from £13,400 to £13,900 (a 3.7% rise). This would not be covered by the full state pension.

For a moderate lifestyle, the annual net income needed is £32,700 for one person, or £45,400 for two. This is up from £31,700 for a single pensioner and £43,900 for a couple. Meanwhile, it would take £45,400 for a single person to have a comfortable lifestyle, rising to £62,700 per year for a couple. This is up from £43,900 and £60,600 last year.

A number of assumptions are made when calculating the income needed to support a ‘minimum’, ‘moderate’ or ‘comfortable’ standard of living.

For the ‘minimum’ level, this assumes someone would spend £55 on groceries a week, have no car, and can afford to take one week-long UK holiday per year, among other needs.

A moderate standard of living is described as spending £56 a week on groceries, running a small car replaced every seven years, and taking a three-star, two-week foreign holiday, plus one long weekend break in the UK per year.

For a comfortable retirement, this assumes someone has the income to spend £75 a week on groceries, to run a small car replaced every five years and to take a four-star two-week foreign holiday, plus three long weekend breaks in the UK per year, among other things.

A minimum net income required for different standards of living

Source: Pensions UK. Retirement Living Standards Update 2026, developed in partnership with Loughborough University Research facility.

The figures reflect increased everyday costs for households, according to Pensions UK. These include food, essential household bills, transport, social activities, and hobbies.

To put the numbers into context, calculations by Pensions UK show that a single person on track to receive the full state pension would, in addition to this, need at least £335,000 in a money purchase (defined contribution) pension to be able to achieve a net annual income (from an annuity) of £31,700 in retirement.

A pension pot of at least £560,000 would be needed to achieve an annual net retirement income of £60,600⁴ – which would support a comfortable retirement.

Worryingly Pensions UK’s research shows the majority of the working population is falling woefully short of meeting the savings required to support even a moderate standard of living in old age.

It found 82% of the working population are on track to reach the minimum standard of living in retirement. But this falls to just 23% reaching a moderate standard and 9% reaching the comfortable category.

Claire Trott, Head of Advice at St. James’s Place (SJP) says: “The increases across the board of the UK Retirement Living Standards isn’t a surprise because of the ongoing cost of living increases. It does remind us that retirement planning isn’t a ‘once and done’ thing and needs an annual review at a minimum. This helps savers check their progress and amend their plans accordingly.

“Having a financial plan can really help. Seven out of 10 people from our 2026 Financial Health Report** said that a plan made them feel more confident in their financial position.”

* Housing costs are not included within the RLS calculations. This is because they will vary widely depending on location and personal circumstances. It means the RLS should be used as a guide only, with individuals adjusting the actual income they’re likely to need in retirement to reflect their own situation, particularly where additional housing costs are likely to be a key factor.

** Opinium, on behalf of St. James’s Place surveyed 6,000 UK adults nationwide between 17th March and 9th April 2026. Quotas and post-weighting were applied to the sample to make the dataset representative of the UK adult population. 

Sources

^{1 Pensions UK partnered with Loughborough University’s Centre for Research in Social Policy to develop the Retirement Living Standards (RLS). The ‘minimum’ standard is based on the ‘minimum income standard’ funded by the Joseph Rowntree Foundation. The ‘moderate’ and ‘comfortable’ standards were developed through research with groups of people across the UK.
2 Pensions UK. These figures are indicative only and are designed to provide a consistent comparison, rather than a personalised target. They are based on current UK tax thresholds and annuity assumptions of around £5,000 to £7,500 per £100,000 of pension savings. Retirement journeys vary widely, and people may draw on their pension savings in different ways. 
3 Calculations based on the Pensions Policy Institute modelling of the working age population to project their future retirement adequacy using the ONS Wealth and Assets Survey and PPI individual model.  
4 Pensions UK. These figures are indicative only and are designed to provide a consistent comparison, rather than a personalised target. They are based on current UK tax thresholds and annuity assumptions of around £5,000 to £7,500 per £100,000 of pension savings. Retirement journeys vary widely, and people may draw on their pension savings in different ways.} 

SJP Approved 03/06/2026