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Is £32,700 Really A Moderate Retirement? (The Answer Might Surprise You)

Arthur's UK Retirement Guide

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(66) The PLSA says a moderate retirement costs £32,700 a year — but most mortgage-free retirees in the UK are living comfortably on £20,000 to £25,000. Arthur breaks down exactly where the £10,000 difference comes from, exposing two inflated spending categories inside the official benchmark: car replacement and holidays. You'll also see why a realistic £250,000 pension pot can generate a comfortable retirement income at a 4% withdrawal rate, how to build a sinking fund for house maintenance costs the PLSA doesn't cover, and why the psychological barrier of spending your savings is the problem nobody talks about. If you've been measuring yourself against a benchmark that was never designed around your life, this video will help you find your real number.

Timestamps:
00:00 – What the PLSA's £32,700 moderate retirement figure actually includes
01:36 – How the benchmark is built and the incentives behind it
06:02 – Car replacement and holiday assumptions inflating the figure
09:44 – House maintenance costs and the care planning gap the figure misses
14:01 – Building a realistic withdrawal plan from a £250,000 pension pot
16:56 – Why retirees struggle to spend savings — and how to shift that mindset
18:32 – Finding your real retirement number and what to do with it

Hashtags: #ukretirement #retirementplanning #pensionuk #plsa #moderateretirement

20 Comments

@andreahomer9434 3 months ago (edited)

I'm still working full time (and have already done so for 33 years) and I'm starting to plan for retirement.
I have never ever taken home £32,700 a year. Ever.
The PLSA are acting on behalf of the pension industry, not retirees.

@deloresvassell531 1 hour ago

Thank you for teaching me something today - I was aware of the PLSA but did not know until watching this that the PLSA represents the pension industry. Now the stupid numbers they spout make sense. It’s clearly in their best interest to lead people to believe that they need to keep working to achieve unrealistic figures that the majority of people don’t get whilst working let alone in retirement. The longer people are working the less money being taken out of pensions hence more profits for them.

@sc00bysnack69 3 months ago

The PLSA figures IMO are a total disgrace. The government ought to step in and monitor this kind of guidance. It’s misleading, worrying and shocking…

@Tensquaremetreworkshop 3 months ago

Most people in work do not receive (after tax and NI and pension contributions) £32,700. And they probably have mortage payments, life insurance, dependants, commuting costs, and a bunch of other things to pay that a retired person does not. By definition, the average person lives a moderate life (unless moderate has a meaning that I have not yet met). So, clearly, PLSA have got it very wrong. What is interesting is why. Surely at least one of the committee could see this obvious flaw. So either they are arrogant (overruling this observation) or they have an axe to grind. Which borders on fraud.

@joannebedford8571 1 month ago

I don't earn that much and i work full time. Dont know many people who do earn that much

@Tensquaremetreworkshop 3 months ago (edited)

The couple figure is £45,400. We cannot spend that, despite running 2 cars and taking 3 holidays a year. My wife is wrong in saying Amazon delivers every day- but not by much. Being overfunded, we do not restrict our spending in any way, other than wanting value received. Still do not hit that number. Despite being comfortable- which is supposed to cost £62,700.

@chequreddemon 3 months ago

I am 64 and still working, I have been recording my spending since 2017 and in 2025 it was £23,000. I am a home owner and run a car and motorcycle etc and don't feel I am missing out on anything

@chirpy999 3 months ago

You can live like a King on that!! Vested interests keep telling you to want more.

@jackiepitchford3965 3 months ago

Good advice, look at what your outgoings are and do your own figures allowing for expected inflation, ignore the money hungry grabbers
Then join the hordes of happy retirees at the pub and bingo lol (or golf and flower arranging, whatever floats your boat 😂)

@kletops46 3 months ago

You might want to look into the 4% Rule...
That's a little light as well.

@Daisybaby43 2 months ago

This also presumes that there are not other savings on top of pension

@gazzercoleman4304 2 months ago

You need to consider more than frugal and thrifty living, though. For example, if you need care in your 80s then full residential care home fees cost £50k-£60k a year per person. Then you have unexpected costs - like a new central heating boiler, or a total loss of their car, or a new roof on your house. People that don’t plan for these think they can live on £20k a year - you can’t without running the risk of it all going wrong!

@shakersgoingup1 2 months ago

Great video, thanks. I always thought these figures were over inflated! As soon as you finish work, you save on commuting costs, lunches at work, chipping in for birthdays, retirements, nights out with colleagues, entering work based 'bonus ball lotto'' and other things I've maybe forgot to mention. It all adds up.

@40173k 1 month ago

The median wage around here is £28150. For a retiree £32700 is more like working for £34300 because national insurance is not paid.

@chrislambert9435 1 month ago

Compare the Finance and Financial outgoings of two retired couples living next to each other, couple number one the Smiths have worked-hard saved-carefully, they have a small private Pension of around £70 per week then they both get the State pension each, they own their two bed Flat. Couple number two, next door is the Jones' they have no private Pension and they do not own their two bed Flat, but they both receive a State Pension each. Which couple is better off ? ?

@dociledeer3818 3 days ago

Got to admit, AI is getting better.

@Tolcarne-jl3yp 3 weeks ago

How come Dave is getting his state pension at 65 I retired last week aged 66 and iam planning to pay my bills and food bill out of the state pension.

@stevecaplan7029 3 months ago

You said actual people spend c £22k but PLAS is £32k but one is pre and the other post tax?

@tancreddehauteville764 3 months ago (edited)

£32,700 a year after tax is not 'moderate', but actually pretty comfortable. Even before tax this amount would be very decent. The problem is that these focus groups expect retirement to be a life that the average middle class 40 year old would aspire to lead - this is completely unrealistic.