Lower domestic gas and electricity bills, compared with a recent peak, are the main reason costs are lower than a year ago for those wanting a basic retirement. Some of this has been offset by higher rail fares.
A two-person household now needs an annual income of £21,600, down from £22,400 a year previously, according to the PLSA.
The minimum standard is calculated to include money for a couple’s weekly groceries, a week’s holiday in the UK, eating out about once a month and some affordable leisure activities about twice a week.
However, for those wanting a better standard of living, the costs have risen.
For what the PLSA calls a “moderate” lifestyle, a single person would need £31,700, up by £400 from £31,300 previously, while two people would need £43,900, up by £800 from £43,100 previously.
This level includes money for running a small second-hand car, a week holidaying in Europe and a long weekend break in the UK.
The PLSA also estimates what income is needed for a “comfortable” retirement, which includes luxuries such as regular beauty treatments, theatre trips and two weeks’ holiday in Europe a year.
For this, a single person would need £43,900, up by £800 from £43,100 previously, and a two-person household would need £60,600 – a £1,600 annual increase from £59,000.
None of the categories include housing costs, because many pensioners have paid off a mortgage, while those who rent often have a benefit entitlement to help them pay.
Zoe Alexander, director of policy and advocacy at the Pensions and Lifetime Savings Association, said; “For many, retirement is about maintaining the life they already have not living more extravagantly or cutting back to the bare essentials.
“We’re not just seeing changes in costs, we’re seeing changes in how retirees live. Retirement isn’t a one-size-fits-all experience. Retirees can share costs, often with a partner, and that can make a huge difference to affordability in later life.”
