Welcome to The Financial Journey Insights series—created by Baggette + Co. Wealth Management to guide you through each stage of retirement planning.
This series covers essential elements for building a confident, secure future, from estimating retirement income needs to managing investments and exploring tax-efficient strategies.
In this insight, we’ll address a fundamental question: How much do singles and couples need for a comfortable retirement?
Understanding these income benchmarks is essential for setting realistic goals and planning for a lifestyle that meets your needs and expectations in retirement.
At a Glance
- Retirement Income Levels for Singles and Couples: Explore how much income is needed for each retirement standard—Minimum, Moderate, and Comfortable.
- Singles vs. Couple’s Needs: Learn about the differing financial requirements based on household structure.
- Key Factors Influencing Retirement Needs: Discover how location, lifestyle goals, healthcare, and inflation shape your retirement requirements.
Imagine entering retirement with clarity and confidence, knowing you have a solid plan for a lifestyle that allows you to enjoy your later years. This blog offers a practical look at what singles and couples need to achieve varying standards of living in retirement—from covering essential needs to enjoying a lifestyle with more financial freedom.
How Much Does a Single Person Need to Retire Comfortably in the UK?
For single individuals, retirement planning requires careful consideration of how to meet personal needs without the benefit of shared expenses.
The Retirement Living Standards provide a helpful benchmark for understanding retirement costs.
The Retirement Living Standards provide a helpful benchmark for understanding different lifestyle costs for singles, categorised by three levels of living standards: Minimum, Moderate, and Comfortable.
The figures produced suggest the following:
- Minimum: This level covers basic living expenses, allowing for some extras but minimal luxury. A single person at this level can afford essentials like housing, utilities, food, and modest leisure activities.
- Moderate: A moderate level offers more financial security and flexibility, enabling occasional dining out, domestic or European travel, and a car. This lifestyle allows a balance of essentials with a few additional comforts.
- Comfortable: A comfortable level supports a fuller lifestyle, including more extensive travel, multiple hobbies, and greater financial freedom for various luxuries. This level is ideal for those who want to explore their interests fully in retirement.
Given these estimates, a single person looking for a comfortable retirement would need approximately £43,100 per year outside London or £45,000 within London.
Estimating the Required Retirement Savings for a Single Person
To calculate the savings required to achieve these income levels, we can apply the Stable Withdrawal Rate of 4%. (You can find out more about the Stable Withdrawal Rate in our blog on “How Much Do I Need to Retire Comfortably in the UK?”)
For a comfortable retirement, a single person would need approximately:
£1,077,500 in savings for an income of £43,100 annually.
So, according to their research to achieve a comfortable retirement for a single person of £43,100, assuming you have the full state pension of £221.20 a week, the additional amount is £31,597.60.
Utilising the Stable withdrawal rate again of 4.00%, that means that you need £789,940 in savings to achieve this.
Below is a table that runs through various scenarios:
| Individual Desired Income (£) | State Pension (£) | Shortall (£) | Pot Required (£) |
| 20,000 | 9,000 | 11,000 | 275,000 |
| 25,000 | 10,000 | 15,000 | 375,000 |
| 35,000 | 11,502.04 | 23,487.96 | 587,000 |
| 60,000 | 11,502.04 | 48,497.96 | 1,212,449 |
As you can see, even to achieve a modest retirement income of £20,000 per year, you could need over £275,000 in savings.
What these figures also highlight is the importance of careful retirement planning.
The Growing Pension Gap
The statistics paint a stark picture. It is estimated that the UK’s pension gap will rise by £6 trillion to £25 trillion by 2050.
In areas with higher living costs, like Dorset and Hampshire, the required savings might be even higher than the UK average.
The number of people not on track for a minimum standard of living in retirement has increased to 38%.
In addition to this, the number of people not on track for a ‘minimum’ standard of living in retirement increased to 38% over the past year highlighting the importance of early and careful planning.
How Much Does a Couple Need for a Comfortable Retirement in the UK?
Planning for retirement as a couple has some key differences compared to planning as an individual. While the overall costs may be higher, there are also some advantages.
The Retirement Living Standards suggest that a couple outside of London needs around £59,000 per year for a comfortable retirement. This might seem like a significant amount, but it’s important to remember that many expenses are shared between partners, such as housing costs, utilities, and transportation.
Sharing Expenses in Retirement
One of the benefits of retiring as a couple is the ability to share expenses. This can make achieving a comfortable retirement more attainable. For example, you might only need one car instead of two, and you’ll likely spend less on heating and electricity compared to two individuals living separately.
Comparing it to what a single person needs, it is only £15,900 per annum in retirement income.
With a full state pension being approximately £11,500 per year per person; that means that if both partners are eligible for the full state pension, a further £4,400 per annum is required to achieve a “comfortable” retirement, compared with a single person. This provides a solid foundation for retirement income.
Estimating Retirement Savings Needs for Couples
Let’s look at this from a practical perspective, and what additional funds are required to achieve the desired level of income:
| Couple Desired Income (£) | Joint State Pension (£) | Shortall (£) | Joint Pot Requirement |
| 60,000 | 20,000 | 40,000 | 1,000,000 |
| 75,000 | 23,000 | 52,000 | 1,300,000 |
| 100,000 | 23,000 | 77,000 | 1,925,000 |
| 150,000 | 23,000 | 127,000 | 3,175,000 |
The “Joint Pot Required” and the subsequent income does not take into account any tax liability, so may be even greater than this for you to retire comfortably.
It is important to seek investment advice to create a portfolio and strategy that is suitable to your own needs and requirements. In many circumstances it is advantageous to have more than one source of income, i.e. ISAs, General Investment Accounts, SIPPs and/or property.
Having a diversified stream of income and portfolio has shown to be advantageous to the investor time and time again.
The importance of taking good advice along the way cannot be overemphasised. Any strategy may need adjustment over time to ensure you stay on track.
Personalising Your Retirement Plan in Dorset and Hampshire
When planning for retirement, it’s crucial to consider your unique personal circumstances to ensure a stable and sufficient income throughout your later years.
Factors such as your current lifestyle, health, and financial commitments play a critical role in determining the amount of income you’ll need to maintain your quality of life.
For those living in Hampshire and Dorset, it’s important to consider the specific economic environment of these regions. Housing costs, healthcare availability, and access to amenities can all impact your retirement budget.
Whether you own a home in the rural New Forest or near the coast in Bournemouth, understanding how your financial needs align with your surroundings will help you create a more tailored and sustainable retirement strategy.
Additionally, local services and community support in Hampshire and Dorset may impact your retirement planning.
With many choosing to downsize or relocate within these picturesque counties, it’s important to evaluate how housing costs, healthcare availability, and access to amenities could affect your income requirements. By considering these personal factors early on, you can ensure your retirement income is well-aligned with the realities of living in the south-west safeguarding your financial well-being as you move into this new phase of life.
How Long Will My Retirement Savings Need to Last?
When planning for retirement, it’s crucial to consider not just how much income you’ll need, but also how long that income needs to last.
With advances in healthcare and improved living standards, many people are living longer than ever before making it necessary to plan for a retirement that could last 20 to 30 years or more.
Whilst this is fantastic news, it also means your retirement savings need to stretch further to support you through these additional years.
Estimating Your Retirement Time Horizon
In 2020, life expectancy at birth in the UK was 78.8 years for men and 82.8 years for women. However, these are just averages. Your personal life expectancy could be longer or shorter depending on factors like your health, family history, and lifestyle.
Estimating your potential lifespan can help you determine how many years your retirement savings need to support you. It’s wise to be conservative in your estimate to ensure you don’t outlive your funds.
The Risk of Outliving Your Savings
One of the biggest risks retirees face is outliving their savings. Without careful planning, your retirement savings can be eroded by inflation, market volatility, and unexpected expenses.
By creating a comprehensive retirement plan that includes diversified investments, budgeting for essential and discretionary spending, and accounting for potential income sources like pensions or Social Security, you can better manage the risk of running out of money during retirement.
Planning for Healthcare Costs
Figure 1: Life expectancy in the UK in 2020 to 2022 fell to approximately the level of a decade earlier (2010 to 2012) for females.
Life expectancy at birth for males and females, UK between 1980 to 1982 and 2020 to 2022.
As we age, the rising costs of healthcare and the potential need for long-term care become a significant financial burden.
Medical expenses can escalate in retirement, especially if you require ongoing treatment or specialised care. Long-term care, whether at home or in a facility, can be one of the most significant financial burdens in retirement.
Incorporating these potential costs into your financial plan—through insurance, savings, or other strategies—can help safeguard your savings and ensure you’re financially prepared for whatever the future holds.
Nursing care home fees in the UK average £1,410 per week, or £73,320 per annum, with some much more expensive.
Some plans and provisions can be made to meet these potential liabilities, and we strongly encourage our clients to consider these as part of overall retirement planning and help provide peace of mind.
The Importance of Regular Pension Reviews
Having a full and structured financial plan can alleviate these concerns greatly. I often use the analogy of a tanker ship. It is easy to make small adjustments to your course as you go through life, but very difficult to make major manoeuvres later on.
An experienced independent financial adviser will continuously evaluate your plan together, so you are able to make small adjustments along the way, ensuring the maximum probability of you reaching your desired destination.
Take the First Step Toward a Confident Retirement
Knowing how much you’ll need for retirement as a single person or a couple is essential in setting realistic financial goals and developing a reliable plan.
At Baggette + Co. Wealth Management, our independent financial advisers work with you to create a retirement strategy tailored to your unique circumstances and lifestyle goals.
What’s Next?
Now that you understand the financial benchmarks for singles and couples, the next step is to explore tax-efficient strategies to maximise your savings. Our next blog in The Financial Journey Insights series will cover “Tax-Efficient Strategies for Retirement Savings” to help you retain more of your wealth for the future.
Experienced Independent Financial Advisers for Your Retirement Planning
If you have questions about financial planning for your retirement, our experienced independent financial advisers in Dorset and Hampshire are here to help.
Contact Warren Kavanagh by email at [email protected], call 01202 676983, or connect with our independent financial advisers in Poole.
Baggette & Company Wealth Management Limited is authorised and regulated by the Financial Conduct Authority. Information is correct to the best of our understanding as at the date of publication. Nothing within this content is intended as, or can be relied upon, as financial advice.
A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can down as well as up which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.
Capital is at risk. You may get back less than you invested.
The value of your investments can go down as well as up, so you could get back less than you invested. Past performance is not a reliable indicator of future performance.
Tax rules may change, and the value of tax reliefs depends on your individual circumstances.
The Financial Conduct Authority does not regulate Tax Planning