New statistics have revealed the size of pension pot you need to secure each of the Pension and Lifetime Savings Association (PLSA)’s Retirement Living Standards “minimum”, “moderate” or “comfortable” retirement.

The analysis by Standard Life, part of Phoenix Group, makes for sobering reading as the spiralling cost of living pushes up the targets for those in work to achieve their retirement dreams.

Single retirees who want to achieve a minimum living standard in retirement, which includes enough for the basics and one week’s holiday in the UK a year but no car, require an annual income of £12,800, according to the PLSA1. Assuming a full state pension (£10,600 a year) is received, a retiree requires an income of £2,200 each year to maintain this standard of living.

Meanwhile, for a moderate retirement standard of living, which allows for a car and one foreign holiday a year, the PLSA calculates an income of £23,300 per year is needed. Assuming a full state pension is received, a retiree would need an annuity which provides £12,700 a year and would therefore currently need to save around £285,000 to secure this.

For a comfortable living standard in retirement, pensioners would need to amass a pot of around £530,000.

How much will an annuity give me in retirement?

The figures are dependent upon purchasing an annuity, guaranteeing an income for life.

Dean Butler, Managing Director for Retail Direct at Standard Life said: “It’s important to note these figures are just a guide, and individual circumstances will vary. Life costs more in different parts of the country, for example, and the figures don’t account for housing costs which a significant minority of retirees currently have and which more are predicted to have in the future as longer-term mortgages surge in popularity.”

Annuity rates have improved by 20% in the last year, meaning people are getting much more value for their money, meaning pensioners can generate larger incomes from their savings, but other forms of pension plans are also available.

Am I on target for a comfortable retirement?

Knowing how much you will need to enjoy the standard of living you hope for couldn’t be easier using the RetireEasy LifePlan.

As well as showing you in easy-to-understand charts how much you can afford to spend each year, you can run different scenarios to illustrate what would happen to your long term plans if you go part time or retire early; cut back on savings because of a cash flow problems; help a relative get onto the housing ladder; pay for care; or downsize or take out a lifetime mortgage later in life.

And if your subscription has lapsed, just a few pounds a month will help you find out exactly where you stand – and enable you to make informed decisions about your financial future well in time.