Experts say people now need £10,900 a year to retire - and it includes Netflix

By Lorna Hughes

Pensions experts say people now need a post-tax annual income of £10,900 for a "minimum standard of living" in retirement.

The calculations for the Pensions and Lifetime Savings Association (PLSA) rise to £16,700 for a couple.

It is the first time Netflix subscriptions and items such as haircuts have been included in the assessment.

The "Minimum Retirement Living Standard" is based on the Joseph Rowntree Foundation’s Minimum Income Standard and covers all a retiree’s needs plus enough for some fun - including social and cultural participation.

It includes a week’s holiday in the UK, eating out about once a month and some affordable leisure activities about twice a week. It does not include a budget to run a car.

The annual budget for the minimum standard has risen since 2019 by £700 to £10,900 for a single person and by £1,000 to £16,700 for a couple in 2021.

The PLSA says a combination of the full state pension of £9,339 per year, and auto-enrolment in a workplace pension, should make the minimum level "very achievable for most people".

It estimates that about three quarters of single employees are likely to achieve the minimum standard.

Those in a couple, who are able to share costs, can expect to meet the minimum level simply from having a full state pension entitlement.

Nigel Peaple, Director of Policy and Advocacy at the PLSA said: The lockdowns caused by the pandemic have given many workers a foretaste of being retired and made people think about the activities and experiences they truly value.

"The pandemic has emphasised the importance of economic security as well as social and cultural participation in retirement.

"With barbers and hairdressers closed during lockdowns and many of us taking scissors to our own hair for the first time, it is little surprise that the research groups agreed the budget for personal grooming should be increased across the three standards.

"The addition of Netflix also gives an insight into what many of us expect to be doing when we finish work.”

Much of the increase has been driven by the rising cost of transport by road and railway.

The minimum also now includes an increase in the budget for hairdressing, from £15 to £25 for women and from £8 to £10 for men, and the inclusion of Netflix, adding around £1.38 each week.

Detailed findings are published in the Centre for Research in Social Policy’s report Retirement living standards in the UK in 2021.

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