The over-55s with defined contribution pensions who plan to buy an annuity say £22,500 is their ideal target retirement income.

The figures back up recent research by the trade body the PLSA (Pensions and Lifetime Savings Association) on what pension savers consider to be a decent retirement income. 

The report by Canada Life found little difference between the genders, with men looking for £22,900 while women say £21,500 is ideal.

There were differing expectations of the ideal retirement income driven by size of pension pot. Pension savers with pots valued at under £200,000 were looking for an income of £20,000, while those with pots valued at over £200,000 would like an income of £28,300.

The ideal income equates to a “moderate living standard”, according to the PLSA retirement living standards research.

Canada Life says that pension pot sizes are the biggest influence on desired pension income. 

When asked about living standards, pre-retirees were split on whether they expect the same standard of living as they have now. Some 46% of respondents thought their retirement living standards would remain as today, while 36% said they would get worse. Only 10% of respondents think their living standards will be better in retirement than they are now.

Twice as many men as women are optimistic their standard of living will improve in retirement (12% vs 6%), with more women saying they feared living standards would fall compared to men (38% of women vs 34% for men).

Some 20% of pre-retirees with pensions valued at over £200,000 think their living standards will be better in retirement compared to 8% whose pensions are valued at less than £200,000. 

One in four (26%) of those with pensions over £200,000 thought their standard of living would fall in retirement, compared to 40% whose pensions are valued at less than £200,000.

Nick Flynn, retirement income director, Canada Life, said: “A generation of savers planning their retirements have relatively moderate ambitions for their ideal incomes. Far from splashing the cash, the over 55s are seeking an income of around £22,500, which combines both private savings and the state pension of around £9,339 currently. This requires the pension and any other savings to generate an income of around £13,161 a year.

“At current standard annuity rates, a pension of £200,000 could deliver around £10,000 a year guaranteed for life, likely to be more for those who qualify for enhanced rates and a better income because of their health or lifestyle.”

• Data sources: Survey of 506 UK adults aged 55+ with a defined contribution pension, who are not yet taking an income and plan to buy an annuity. Fieldwork by Opinium in October 2021. Also data from https://www.retirementlivingstandards.org.uk/