Letter from the Founder – The Retirement Number That’s Putting People off Saving

There is a number that I see quoted a lot when reading about retirement. The Pensions and Lifetime Savings Association (PLSA) says a single person needs £43,900 a year after tax to achieve what it calls a comfortable retirement.

That figure covers a two-week European holiday, some weekend breaks, a car, and regular eating out. Nothing wildly extravagant. No yacht or Ferrari.

However, the median full-time salary in the UK is only £39,039.
So we are basically asking people to save for a retirement that pays more than most of them currently earn.

I understand the logic. Costs look different in retirement. Healthcare needs can increase. You have time to spend money that a working week used to absorb.

But I have a real concern about what happens when people see that £43,900 figure and conclude that saving is pointless because they will never get there. Paralysis is not a pension strategy.

There is also something important missing from the PLSA number that does not get said clearly enough. The full new State Pension is worth £12,548 a year in 2026/27.

That is already part of the picture for anyone with a full National Insurance record, and it does not get mentioned anywhere near often enough when the comfortable retirement figure is cited. Strip that out and the private saving gap for a comfortable retirement is closer to £31,000 a year, not £43,900.

That is still a stretch for most people. But it will feel a lot more achievable for many people.
Then there is the question of housing. The PLSA figures are calculated after housing costs.

The moderate and comfortable standards are described as unattainable for the majority of the population, even after factoring in housing and other additional sources of income.

But that calculation does not distinguish between someone paying rent in retirement and someone who owns their home outright. If you are mortgage-free by 65, your income needs are structurally lower than those of someone still renting.

Homeownership is not equally distributed, and the retirement savings conversation has not taken that into consideration.

My view is this. The comfortable retirement standard is a useful benchmark, not a minimum requirement.

Most people who enter retirement with the full State Pension, a paid-off home, and a modest private pension pot will be in reasonable shape. Not Maldives-every-year shape, but not anxious about the gas bill either.

What worries me is a messaging environment where the only figure people hear is £43,900, stripped of context, and the response is to stop trying.

The answer is not to lower ambition. It is to be honest about what the numbers actually include, what already exists in the system, and what a realistic target looks like for the life you actually expect to live.

We need people to save more. We will not achieve that by making the goal feel impossible before they have started.

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Sources: PLSA Retirement Living Standards 2025, Loughborough University / PLSA; ONS Annual Survey of Hours and Earnings, October 2025; Standard Life / Age UK, State Pension 2026/27 rate.