How much do I need to retire | UK
How much do I need to retire is a question asked by so many of us, as we approach our later years. This month, in Your Retirement Questions Answers, Ian Holloway, Project Director at Burnham Waters looks to address this question and to provide some insight along the way.
Reflecting on a recent, joint study released by Legal and General and the Happiness Research Institute, Ian explores how much money you really need, to enable a happy retirement.
Happiness in retirement: the report
According to Legal and General and the Happiness Research Institute, an independent Danish think tank focusing on wellbeing, happiness and quality of life, the happiest retirees have an average total monthly income of £1,700. To get at least that much a month, and assuming you retire at 67, they state that you’ll need to have a pension pot of about £222,000 and be eligible for the full State Pension (which is currently £921 a month).
So how did Legal and General and the Happiness Research Institute arrive at these happy income figures – and does this ring true for you?
Their joint report studied the lives of 3,000 retirees. They explored a range of different wellbeing measures for people in later-life, such as social connections, health and of-course income.
And what did they find? That financial status turned out to be the most important factor.
According to the Happiness Research Institute, the study showed that money plays a crucial role in the happiness of today’s retirees and that being without sufficient resources led to worry and stress and a lower quality of life for people in the UK.
It’s worth noting here that the monthly income figures they have referenced exclude any housing costs – they apply to homeowners who’ve paid their mortgages off. If you do have any housing costs, you’ll need to add them to the £1,700 to get the equivalent income you’ll need.
How much do we need to retire comfortably in the UK?
There is other research out there that also gives us an indication of how much we need to retire comfortably in the UK.
In fact, Pensions UK, a not-for-profit organisation, which positions itself as the ‘voice of pensions in the UK’ provides some helpful benchmarks for retirement, in their Retirement Living Standards.
According to Pensions UK, research shows 51% of people focus on their current needs and wants at the expense of providing for the future and only 23% of people are confident they know how much they need to save. The Retirement Living Standards aim to help savers overcome this challenge and give them more confidence about their retirement saving.
The Retirement Living Standards are based on independent research by Loughborough University and have been developed to help individuals picture what kind of lifestyle they could have in retirement and the costs involved.
The Standards aim to offer a clear and realistic view of people’s retirement spending in the UK, helping you use your current lifestyle and cost of living as a guide for what you might need in the future. They have arrived at three different categories – with varying amounts of funds required to support each one:
1. Minimum lifestyle: £13,400 a year (single) / £21,600 (couple)
2. Moderate lifestyle: £31,700 a year (single) / £43,900 (couple)
3. Comfortable lifestyle: £43,900 a year (single) / £60,600 (couple)
These figures assume you’ve already paid off your mortgage and are debt-free. They include essentials such as food, utility bills, transport, and social activities — with higher tiers allowing for holidays, dining out, and more luxury.
The amount you’ll need to retire comfortably in the UK of-course depends on your lifestyle, your location, and your expected expenses. However, the Retirement Living Standards provide a helpful benchmark and can be useful in your retirement planning.
Do you have enough money saved to support a happy retirement?
With all of the above research in mind, how can you make sure that you have enough money saved to support a happy retirement?
If you are trying to work out how much money you will need in retirement and how much you are likely to have based on current projections, the Money Helper Pension Calculator is a great, free resource, which can help you to forecast your likely pension income.
Money Helper is backed by the government and aims to offer free and impartial help around money and pensions. They also offer a range of helpful tips and advice on everything from ways to save for retirement to ways to boost your pension.
Is your income all that matters for a happy retirement?
Despite all this focus on money, it is worth remembering that your happiness in retirement is not solely impacted by your income. In fact, the report by Legal and General and the Happiness Institute demonstrated that other factors, like social connections and good health, are also vital to staying happy as you age. The research found that, as well as a good income, the happiest retirees were also more likely to be satisfied with their:
• Day-to-day routines
• Amount of free time
• Relationships with family and friends
• General social lives
Having an established routine, an active social scene, and access to amenities and facilities that support your lifestyle are so important too, and one of the areas that we really focussed on when delivering the homes at Burnham Waters.
Read our recent blog post to explore how our homes have been designed to support later living here.
Retirement homes designed to support a happy and active lifestyle
Our homes at Burnham Waters have been designed specifically for the over 55s. Our aim was to create a development that gives residents the feeling of independence, privacy and the ability to be connected to their friends and neighbours, whilst being able to easily access any medical facilities, shops and amenities whenever they need them. We believe that by offering residents a sense of security and accessibility, we can help contribute to a happy retirement.
From an onsite doctors surgery to a parade of shops, with plans for a bakers, fish and chip shop, beautician, café/restaurant and grocery store, everything will be close to hand.
Burnham Waters has been designed so that walking around the development will be a real pleasure, with inter-connecting tree-lined pathways, lakes and water features giving you great views wherever you go.
We’re wholeheartedly dedicated to promoting an active and healthy lifestyle because we truly believe in the benefit it has on every individual’s quality of life – and their sense of happiness. We will have on offer an extensive range of onsite facilities and activities, which will be accessible to each and every resident. From a swimming pool and tennis court to a gym and fitness suite with organised classes and allotments – there’s lots of choice.
If you are keen to stay fit and active, read our recent blog post, which provides some top tips for keeping healthy in retirement or why not explore all of our onsite leisure facilities here.
Find out more about Burnham Waters
Located in Burnham-on-Crouch in Essex, Burnham Waters is a new lifestyle village for the over 55s, comprising a collection of one, two and three-bedroom retirement bungalows – the first of which are now ready to move in to!
In addition to a collection of new homes, the new village will offer residents access to a host of leisure facilities and amenities, to support an active lifestyle.
Explore the amenities on offer at Burnham Waters here.
Explore the lifestyle facilities on offer at Burnham Waters here.
If you’d like to know more about our community for the over 55s in Essex, simply email us at info@burnhamwaters.co.uk, call our sales team on 01621 861559, or complete our form for a downloadable brochure.
Our sales suite is open daily, 10am – 3pm and we have show homes available for you to view. Why not call in and take a look for yourself?
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