The annual cost of a 'moderate' retirement is up £8000 as experts predict grandparents will need to continue supporting other family members.

The Pension and Lifetime Savings Association (PLSA) revealed that the income required for a moderate lifestyle in retirement is £31,300, up from £23,300 in 2022/23.

This threshold was calculated by the Centre for Research in Social Policy at Loughborough University on behalf of the PLSA.

It notes that there are three retirement lifestyles; minimum, moderate and comfortable.

The Northern Echo: The cost of a moderate retirement is £8000 higher per year.The cost of a moderate retirement is £8000 higher per year. (Image: Getty)

Rising costs from food and energy bills as well as shifting expectations in retirement lifestyles have played a part in driving up the yearly sum needed to live comfortably.

The research stated that there was an increased importance on people spending time with friends and family, adding that priorities have changed since the pandemic.

Despite, rising costs, the Government's triple lock on pensions was praised for helping to safeguard against rising living costs for retirees.

Cost of living crisis placing 'enormous pressure' on households amid £8000 rise for retirement

Professor Matt Padley, co-director of the Centre for Research in Social Policy at Loughborough University, said: “In this year’s findings, we see the strong effects of rising prices in what’s needed to meet the cost of food and energy.

“Following the Covid pandemic, this latest research highlights a pronounced need and enthusiasm among the public for shared experiences beyond the confines of their homes, including activities like eating out and holidays.”

Nigel Peaple, director policy and advocacy, PLSA, added: “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.

“It’s important for workers saving for retirement to remember the standards are not prescriptive targets, they are a tool to help you engage with the type of spending you think you will do in retirement and to help you plan for it.

The Northern Echo: Rising food and energy bills were also said to be causing a strain on households.Rising food and energy bills were also said to be causing a strain on households. (Image: Getty)

“It is also worth highlighting that a couple who each has a full entitlement to the state pension will achieve the minimum level, and if each is paid average earnings throughout their working life, they have a good chance of enjoying many aspects of the moderate living standard.

“Working and saving is likely to vary over a lifetime – for example, taking time off to have children – so it is important to adapt workplace pension contributions to make up for periods not saving.

“Many pension providers now provide tools and calculators on their online platforms to allow savers to pick-and-mix elements of each retirement living standard, allowing them to leave out the things they don’t see as part of their life and tailor the standards to their individual circumstances and preferences.”