Some £250,000 more in savings is required by single retirees to have the same quality of life as their married peers, analysis by pension firm Standard Life shows.
While couples can pool savings and share expenses, single people must stump up for utility bills, holidays and groceries alone.
Singles need an income of £31,300 a year to fund a moderate retirement, according to figures from industry body the Pensions and Lifetime Savings Association (PLSA). Included in the budget is a fortnight’s all-inclusive holiday in the Mediterranean, £55 for weekly groceries and up to £1,500 on clothes and shoes annually. It assumes you own your home.
For couples, the same quality of retirement will cost £43,100.
However, the state pension alone is not enough to cover this.
If a single pensioner receives the full new state pension of £11,502.40 a year they would need an annuity paying £24,480 to have an annual income of £31,100 after income tax, according to calculations from Standard Life.
Counting the cost: Singles need an income of £31,300 a year to fund a moderate retirement
This assumes they retire at age 66 and the annuity is linked to the Retail Price Index. To buy this annuity, they will need to have amassed a £505,000 pension pot.
However, a couple who both receive the full state pension need an annuity worth £24,585.20 to have an annual income of £43,100 – the amount to get a moderate retirement– after tax.
Their combined pension pot needs to be £511,000 to buy this annuity. However, as this is split between two, that’s just £255,500 each – £250,000 less than the amount a single pensioner needs for the same quality of life.
And when looking for a more comfortable lifestyle, the premium for single pensioners widens further still.
A comfortable retirement costs £59,000 a year for a couple but £43,100 for a single retiree, says the PLSA.
A single pensioner will need to have saved almost £349,000 more than each person in a couple to afford this lifestyle, Standard Life analysis shows.
Mike Ambery, retirement savings director at the firm, says: ‘Solo living comes with a financial price tag. But let’s not forget that relationships don’t always last – and the importance of pension planning extends beyond just those who are single today.
‘Awareness of these figures can help when considering pension sharing in divorce settlements or preparing for a potential single retirement.’
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