Multiple generations risk drifting towards a retirement that falls short of their expectations, Rathbones has warned, following publication of new Retirement Living Standards (RLS) data.
The benchmarks now show that a Minimum retirement lifestyle costs £13,900 a year for a one-person household and £22,500 for two people. A Moderate lifestyle costs £32,700 for one person and £45,400 for two, while a Comfortable lifestyle costs £45,400 and £62,700, respectively. Crucially, RLS expects just 23 per cent of the population to achieve Moderate levels and only 9 per cent to reach Comfortable.
Previously, Rathbones research highlighted the scale of the challenge for younger savers, outlining how Gen Z could need a pension pot of around £3.1 million to achieve a comfortable retirement, once inflation over their lifetime is taken into account.
Rebecca Williams, Divisional Lead of Financial Planning at Rathbones, said:
“These latest figures should set alarm bells ringing across multiple generations. There is a real risk that people are quietly drifting into a retirement that falls well short of what they expect. That so few are on track to achieve a comfortable retirement is a concerning reflection on the lack of preparedness nationally, given how hard millions work week in, week out. I fear many are in for a sharp shock when they stop working.
“Automatic enrolment has been a real success story — it’s helped millions of people start building retirement savings who might not otherwise have done so. But there is a risk that minimum contribution levels become seen as ‘enough’, when for most they’re unlikely to deliver the financial security they’ll actually want in later life.
“Small decisions made early on can make a meaningful difference to retirement outcomes over time. But it is just as important that people build clear, realistic plans for the lifestyle they want. Without that, too many risk drifting towards a retirement that looks very different from the one they had in mind.”
