Aon OnePlan

Retirement Living Standards (Updated)

There are three Standards:

• Minimum – covers all your basic needs with some left over for fun.
• Moderate – provides more financial security and flexibility.
• Comfortable – provides more financial freedom and some luxuries.

You can view the latest figures for each Standard, for one and two-person households on the website: www.retirementlivingstandards.org.uk.

Regularly updated (Updated)

The Standards are updated regularly, usually each year following up-to-date research carried out by Pensions UK and Loughborough University. 

They review the costs of goods and services and any changes in people’s general spending habits and expectations for retirement to ensure that the Standards remain broadly in line with the cost of living.

The underlying data is taken from a cross-section of society – different ages, backgrounds, ethnicities and circumstances – to ensure that the Standards are balanced.

What's included in the Standards? (Updated)

The Standards are based on the cost for a typical basket of goods and services. 

They include items from the following categories:

• household bills
• food and drink
• transport
• holidays and leisure
• clothes and personal
• helping others.

The specific items that are included may not be appropriate for everyone, which is why the Standards are intended as a ‘rule of thumb’.

What's not included in the Standards? (Updated)

The following costs aren’t included within the basket of goods and services:

• Mortgage or rent – the Standards assume that you’ll be mortgage and rent-free in retirement.
• Social care – these costs are very specific to individuals, so the Standards don’t take these costs into account.
• Dependants – the Standards don’t take into account any financial support of dependants, other than a partner.  For example, living with relatives could change your expenditure.

Income versus expenditure (Updated)

The figures for each Standard reflect what someone might need to spend in retirement rather than the income needed. 

Your retirement income will be subject to tax as earned income, so factor this in when reviewing your own situation.

Which Standard are you on track for? (Updated)

To check if you’re on course to achieve the standard of living you want when you retire:

• Check the value of your Aon OnePlan savings by logging into the member website via the 'My Account' page.
• Check the value of any other pension savings you have – these might be in the ARP and/or in other pension arrangements.
• Factor in your State Pension entitlement  – to find out what your State Pension is expected to be and when you’ll receive it. You can check your State Pension Age, get a State Pension forecast and review your National Insurance contributions on the Gov.uk website.
• Allow for any other sources of retirement income you may have, such as ISAs or rental income.
• Work out your approximate total yearly income and deduct income tax.