It can be hard to picture the lifestyle you could have in retirement – and how much you might actually need to make that happen.
For most members the combination of their Mercedes-Benz pension and the State Pension will go a long way towards funding their life after work, but will it be enough for you? Recent research has shown that as many as 77% of people don’t actually know how much they would need to make their desired life after work a reality – and that’s quite a significant proportion.*
If that sounds like you, then we’re here to help. The Pensions and Lifetime Savings Association (PLSA)’s Retirement Living Standards are intended to cut through the jargon that surrounds retirement planning, helping you think in a practical way about the kind of lifestyle you could lead in retirement – and how much you might need to live on – based on three different standards of living: ‘minimum’, ‘moderate’ and ‘comfortable’.
Whether you’re planning to take your savings tomorrow, next year or in 20 years’ time, it’s worth taking the time to understand how much you might need in the future, so you can make the right decisions today. Plus, if you’ve recently retired, the Retirement Living Standards may provide a helpful sense check of what you can reasonably afford.
Here are the key figures for a single person – and for a couple:
*Source: www.retirementlivingstandards.org.uk. These amounts would fund this lifestyle for people living outside London. See www.retirementlivingstandards.org.uk/details for more information.
What do I need to do if I’ve not yet retired?
To help you make the most of the Retirement Living Standards and ensure you’re ready for life after work, follow our simple steps:
- Think about the future you’d like – and what that might cost
- Take stock of your current retirement savings
- Consider your options
Visit www.retirementlivingstandards.org.uk and take the time to explore the different categories (e.g. food and drink, or holidays and leisure) so you can picture what life after work might look like for each of the three different standards of living. How much would your desired lifestyle cost?
Important: Remember that the Retirement Living Standards are only a rule of thumb – and everyone’s financial circumstances are different. For example, the standards assume that you will be mortgage and rent free at retirement (because that is still the case for most retirees). However, you may need to factor in these and other costs (e.g. social care) into your retirement planning, depending on your personal circumstances.
To help you know where you stand, you will need to pull together your current retirement savings. This could include:
- An estimate of your income from the State Pension.
- Your pension from the Mercedes-Benz UK Pension Scheme.
- You can find out the current value of your pension savings through the Scheme on ePA or through the Scheme Administrator
- Any other savings or forms of income you may have (e.g. another pension from a current or previous employer).
- If you need help tracking down a pension with a previous employer, go to www.gov.uk/find-pension-contact-details or call 0800 731 0193
- You should now have a better idea of what you may need in retirement and what you currently have saved towards this. If there’s a gap, then now is the time to think about addressing it. And if there is not, think about whether you could comfortably make your future that little bit brighter still.
There are a couple of ways you could do this:
- Could you save more, e.g. through a current workplace pension scheme?
- Could you work for longer?
Whatever you decide, it’s important to understand the options you have at retirement through the Mercedes-Benz UK Pension Scheme. Depending on your personal circumstances, different options may be more appropriate for you.
If you’re not sure where to start, watch our short video on the Pensions Hub to explain the options available to you through the Scheme.