Earlier this year, a report was published by the Pensions and Lifetime Savings Association (PLSA) highlighting the income a retiree needs in order to life an enjoyable and comfortable retirement. Cost of living increases as well as other rising expenses have dramatically impacted the annual income needed to enjoy retirement.
But there are ways to make it work and, if you’re looking for some ideas on ways to boost quality of life in your later years no matter your pension budget, read on.
What is the price of retirement?
According to the PLSA, there are three different budget categories when it comes to quality of life during retirement.
As with everything, the calculations are done looking at multiple contributory factors including:
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The rate of inflation (and predicted inflation over the next 12 months)
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Cost of living (related to outgoings such as rent, mortgage, groceries, utility bills, transport and other general living expenses)
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The ongoing expectation of supporting children for longer and contributing to the raising of grandchildren (such as a living inheritance)
The PLSA has calculated the costs associated with three different comfort levels, which includes everything retirees can look to enjoy depending on their annual income after they leave work, including State Pension.
The Minimum lifestyle
If you are in the ‘minimum’ group, you have a lower annual income and live a lifestyle providing the more basic needs. This includes covering household bills and groceries, as well as a one-week staycation, use of public transport and minimal monthly leisure activities. Individuals in this group have an income of £14,400 per year while couples have £22,400.
Living Moderately
The moderate retirement is felt to be the happy medium with an associated annual income of £31,300 for someone living alone, while a couple would need £43,300. It’s felt that this is the spot most people should be aiming for.
Being in this bracket means you will have more financial flexibility and security, can afford one foreign holiday a year and enjoy more social and entertainment outings a month as well as fulfilling the basic needs of rent/mortgage, household bills and groceries.
The Comfortable retiree
If you’re in this retirement bracket then you’re looking at a more luxurious retirement with more holidays, day trips and other luxuries on top of the usual living expenses. In order to achieve this, you need an annual income of £43,100 as a single person or £59,000 as a couple.
3 tips for boosting your quality of life in retirement
So, if you’re headed towards retirement, or already there, what can you do that could help you to reduce your outgoings and boost your quality of life?
Below we have a few recommendations to consider.
1. Downsize your bills and living space
As well as reducing stresses that you hadn’t considered, moving has many other benefits, including:
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Lower running costs – a smaller property could cost less to heat in the winter and keep cool in the summer
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Easier to maintain – with less space could come less upkeep, such as a smaller garden
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Council tax – though it’s not always the case, downsizing could mean that you’re in a lower payment bracket, thus reducing your outgoings.
2. Move to a new build
Have you been thinking about moving to be nearer friends or family? Or perhaps you want to live somewhere closer to public transport and amenities. As well as being ready to move in and fitted with the latest appliances, a new build has many advantages over an older property. They are often built with environmental factors in mind, including lower bills, more efficient heating and need little to no maintenance. A new build is ready to move in and enjoy from day one.
3. Make some home improvements to reduce outgoings
Though it may sound a little counterproductive, the saying is ‘spend money to make money’ and in this instance it would be ‘spend money to save money’.
There are many ways to reduce outgoings by making a few changes. Things like loft and wall insulation, ensuring that the seals are fitted correctly on double-glazed windows and reducing the temperature on the thermostat are all recommended methods for reducing household bills in the long term.
With the publication of these figures by the PLSA, there are certainly a lot of things to consider when it comes to planning for your future.
If you are over 60 and have been considering moving, but you’re struggling to find a property you like within your budget, Homewise could help. With the Home for Life Plan you could secure your dream property for up to 59% less* than the listed market price. You could move to a new home and enjoy a mortgage and rent free retirement without any of the associated worry, stress and unnecessary expenditure.
To get a better idea of how the Home for Life Plan could help you, try our online calculator. It’s quick and easy to use and could give you a better idea of your potential house-buying budget.
*Savings range from 8.5% to 59% for freehold properties and depend on the customer’s age, personal circumstances, and property criteria. Only available to those over sixty years old. Terms and Conditions apply.