Exact income you need every month to enjoy happy retirement - and most Brits fall way short

A new report has showed how much Brits need to live comfortably in retirement - and it's far more than the state pension alone

A new report by Legal and General and the Happiness Research Institute has found that UK retirees need a monthly income of £1,700 to fully enjoy their retirement years, equating to an annual total of £20,400. Despite this, the research indicates that only about a third of current retirees achieve this level of income, as the country prepares for Chancellor Rachel Reeves' autumn statement which is expected to introduce further "painful" cuts, including changes to the Winter Fuel Payment.

The study highlights that just 38% of retirees have an income exceeding £1,700 per month, while a stark 22% manage on £1,000 or less, a figure notably lower than the £1,200 monthly minimum recommended by the Pensions and Lifetime Savings Association for basic living costs, reports the Express.

Furthermore, the survey revealed that one in four respondents struggle with financial planning, 20% find it hard to budget for regular grocery expenses, and 9% often cannot afford essential items because of financial constraints.

Additionally, one-third reported that limited funds have affected their social life, leading to increased loneliness and impacting their overall wellbeing.

The study, examining the lives of 3,000 retirees, investigated their wellbeing considering aspects such as social connections, health, and income. It found that financial security is key to a fulfilling retirement, with well-being generally plateauing once income exceeds £2,000 per month.

Yet, finances aren't the sole factor; the happiest retirees enjoy regular daily activities, leisure time, and robust social networks with loved ones. Legal & General cautions the younger demographic aiming to retire in the late 2060s about the impact of inflation, suggesting they may require an annual income of £77,145 for a comparable level of retirement satisfaction.

They outlined a savings blueprint: "The average person along with their employer would need to set aside nearly 10% of their qualifying income every month, from the age of 22 until retirement."

The guideline presumes an uninterrupted career and home ownership by retirement to avoid rental expenses. However, those planning to rent after retiring could be advised to save up to 21% of their earnings, according to experts.

Meik Wiking, CEO of the Happiness Research Institute, stated: "Being without sufficient resources to make ends meet causes worry and stress and a lower quality of life for people in the UK. That is especially the case for people in retirement. The good news is that there are ways we can improve happiness levels by planning and saving for retirement."