Single pensioners need larger retirement savings
Single pensioners need £225,000 more in their pension pot than couples to achieve a ‘moderate’ standard of living in retirement.
New analysis by Standard Life compared the pension savings needed by single and couple pensioners.
It examined what pensioners need to save to achieve the Pension and Lifetime Savings Association’s three retirement living standards: ‘minimum,’ ‘moderate,’ and ‘comfortable.’
It found that single pensioners need to save £54,500 just to meet the PLSA’s minimum standard, while couples with two full state pensions would not need any savings beyond the state pension to reach the same level.
Single pensioners would need to save £439,000 to achieve a moderate retirement standard of living while pensioner couples would need just £214,000 each.
The biggest disparity related to pensioners seeking a comfortable standard living in retirement. Single pensioners would need to save £709,000, £311,000 more than the £398,000 each that a pensioner couple would need.
Retirement savings needed for single pensioners and pensioner couples to secure an annuity
|
PLSA Retirement Living Standard
|
Pot needed for Single Pensioners
|
Pot needed for Pensioner Couples (per person)
|
Difference
|
|
Minimum
|
£54,500
|
N/A – enough on two state pensions
|
£54,500
|
|
Moderate
|
£439,000
|
£214,000
|
£225,000
|
|
Comfortable
|
£709,000
|
£398,000
|
£311,000
|
* Figures assume retirement at the age of 66, single life annuity, no guarantee, paid monthly in arrears, linked to RPI, non-smoker with no underlying health conditions. Account for tax free income up to Personal Allowance and then income taxed at 20%
Mike Ambery, retirement savings director at Standard Life, part of Phoenix Group said: “Whether single by choice or by circumstance, solo living comes with a financial price tag. While it seems unfair, mortgage, rent, utility bills and holidays costs don’t simply halve for those living alone.
“The same applies to pension savings. While couples can combine their resources, single retirees need to build up much more to achieve the same lifestyle in retirement.”
He warned that relationships don’t always last, and the importance of pension planning extends beyond just those who are single today. “Awareness of these figures can help when considering pension sharing in divorce settlements or preparing for a potential single retirement.”
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