How much does a comfortable retirement cost?

A comfortable lifestyle means different things to different people. For some, 'comfortable' means sports cars, second homes and champagne for breakfast. But for most people it means financial security and perhaps a couple of holidays a year; the Pension and Lifetime Savings Association suggest this would cost between £20k-£30k for singles and £30k-£50k for couples.

A comfortable retirement means having your expenses fully met, so the most important thing to get right is how much your lifestyle actually costs. Most people have no idea how much money they spend and its the cornerstone of financial planning. You get this right, and you are onto something! Having met your expenses, and protected yourself against inflation (topical right now), it is obviously really helpful if you have additional funds to help hold an emergency fund and some extra funds to splash out on things that make some dreams turn into reality.

How long is a piece of string?! It comes down to what kind of lifestyle you want in retirement. Of course you need to cover the basics - the heating and the eating - which is where state pension can come in. For Mr and Mrs this can provide approaching £20k pa. However, you want your retirement to be aspirational - you want to enjoy yourself - and have the flexibility to retire when you want. So it is vital to save into personal pensions and other vehicles thorughout your working life. The pension lifetime allowance £1.073m . A sensible drawdown rate will vary person to person but might be 3-5%. That will give you c.£40-50k pa. On the other hand - the average UK retirement pot is c.£61k - which is not going to go a long way to fund 25 plus years of retirement. So think about about what you want or need to spend and work that back (at a 3,4,5% drawdown rate) and see how much you need to save.