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Pensions income needed to retire rises

HMRC issues guidance on abolition of pensions lifetime allowance

The amount needed for a single person to have a moderate retirement has risen to £31,300, according to the Pensions and Lifetime Savings Association (PLSA). 

The rising cost of living and an increased importance on socialising following the pandemic had pushed up the income required by £8,000, the PLSA said. 

The PLSA uses evidence from focus groups to make the estimates, and they are intended as a guide for those planning their retirement savings. 

The calculations are pitched at three different levels – minimum, moderate and comfortable – and are developed and maintained independently by the Centre for Research in Social Policy at Loughborough University. 

They estimated that a single person needed £14,400 a year for a minimum lifestyle, and £43,100 a year for a comfortable retirement. 

Couples required a joint £22,400 at the minimum level, £43,100 at a moderate level and £59,000 at a comfortable level. 

Nigel Peaple, Director for Policy and Advocacy at the PLSA, said:  

‘The cost of living has put enormous pressure on household finances over the last year and, as the research shows, this is no different for retirees.’ 

Reference: PLSA website

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