Find out more. Contact Client Login SERVICES ABOUT CAREERS INSIGHTS CONTACT BOOK APPOINTMENT Back to Insights News PLACING A COST ON RETIREMENT 11 November 2021 SHARE One traditional way to answer the question of how much income you will need in retirement is to fix the amount as a percentage of pay. For example, when final salary pension schemes were more common, their target was often around two thirds of earnings. While this approach produces an easy to calculate number, it is arbitrary. For low earners it may produce too low a number, while at the opposite end of the scale the result may be too high. An alternative is to focus on retirement living standards, an option that has been supported in the UK by the Pension and Lifetime Savings Association (PLSA) and is mirrored by approaches used in other countries. The PLSA sets three levels of post-pandemic retirement: MINIMUM MODERATE COMFORTABLE What standard of living could you have? Covers all your needs, with some left over for fun. More financial security and flexibility. More financial freedom and some luxuries. House DIY maintenance and decorating one room a year. Some help with maintenance and decorating each year. Replace kitchen and bathroom every 10/15 years. Food and drink A £41 weekly food shop. A £47 weekly food shop. A £59 weekly food shop. Transport No car. 3-year-old car replaced every 10 years. 2-year-old car replaced every 5 years. Holidays and leisure One week in the UK and a long weekend in the UK every year. 2 weeks in Europe and a long weekend in the UK every year. 3 weeks in Europe every year. Clothing and personal £410 for clothing and footwear each year. £730 for clothing and footwear each year. £1,200 for clothing and footwear each year. Helping others £10 for each birthday present. £30 for each birthday present. £50 for each birthday present. Where would you want to be on those scales? It’s likely that most of us would veer towards ‘Comfortable’. Now for the annual cost in terms of after-tax income: If the numbers surprise you, then it is probably time to start checking that your retirement funding will meet the standard of living that you want. The value of your investment and the income from it can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice. RELATED INSIGHTS 21 December 2018 New Probate Fees To Affect Many Estates The Government has revived plans to… News VIEW ARTICLE 15 January 2020 The 2019 Investment Year The world’s share markets enjoyed strong… News VIEW ARTICLE 16 November 2020 Some Light In The Dividend Tunnel A recent report on UK dividend… News VIEW ARTICLE TO FIND OUT HOW CHASE DE VERE CAN HELP YOU ACHIEVE YOUR GOALS, ARRANGE YOUR COMPLIMENTARY CONSULTATION. ARRANGE APPOINTMENT RELATED SERVICES ADVICE FOR YOU LEARN MORE JOIN OUR SUBSCRIPTION SERVICE TO RECEIVE: EDUCATIONAL NEWS UPDATES & UPCOMING EVENTS SUBSCRIBE Receive business advice updates Receive personal advice updates By signing up to our email subscription service we will send you regular emails with the latest insights from Chase de Vere. By signing up you are agreeing to our term and conditions that can be found here. 0345 300 6256 CLIENT.SERVICES@CHASEDEVERE.CO.UK Home Careers Insights Privacy Cookies Terms of Use About How to make a complaint Gender Pay Gap Report Best Execution Report Modern Slavery Statement Linkedin Twitter Disclaimer: Investments can go up and down in value, so you could get back less than you put in. The Financial Conduct Authority does not regulate cash flow planning, tax or estate planning. © Copyright Chase de Vere / 2021