Pensions UK’s updated Retirement Living Standards (RLS) provide a timely reminder of the growing challenge savers are facing to have the income needed to meet their lifestyle expectations in retirement, industry figures have stated.

Responding to the latest RLS, Quilter calculated that a single person would need a pension pot of £691,000 for a comfortable retirement.

This falls to £413,000 for a moderate lifestyle, while the minimum standard can largely be met by the state pension alone, with only limited additional savings required.

“While most people are on track to cover the basics, far fewer are likely to achieve the level of flexibility and financial security many would aspire to,” said Quilter head of retirement policy, Jon Greer.

“These figures also assume people are mortgage-free, which will become less common for future generations who are taking out much larger mortgages with far longer terms.

“Factoring in housing costs could push the required income higher still, making early planning and regular reviews even more important.”

LCP co-head of consolidation and DC team partner, Lydia Fearn, added that the updated standards provided a valuable and timely reminder of the gap between the retirement many people aspire to and what current savings levels are likely to deliver.

“As the Pensions Commission considers the future of automatic enrolment, these findings reinforce the need for collective action across government, employers and the industry to improve retirement adequacy and help more people achieve the outcomes they expect in later life,” she noted.

Meanwhile, St. James’s Place head of advice, Claire Trott, said the RLS underlined the growing challenge facing savers, with the cost of retirement rising across the board.

She highlighted that, unlike some previous updates to the RLS, costs have increased across the minimum, moderate and comfortable standards, reflecting the continued pressure on household finances.

People’s Pension proposition director, Kirsty Ross, said it was understandable that long-term savings can slip down the list of priorities amid the rising cost of everyday essentials.

“The challenge for the pensions industry is helping savers understand not just what retirement might cost, but what practical steps they can take today to improve their future outcomes,” she added.

PensionBee VP personal finance, Maike Currie, concluded: “The cost of retirement has risen by around 3-4 per cent across all RLS, broadly in line with the inflationary backdrop, reinforcing the challenge facing savers.

“While the increases may appear modest, the bigger headline issue is that too many people are still not saving enough to achieve the retirement lifestyle they expect.”

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