Retirees will not be able to afford those long, luxurious holiday trips around the warm seas of the Mediterranean any time soon according to the latest numbers by the Office for National Statistics.
With the average private pension wealth in Britain at just £136,150, retirees’ coffers fall short of the amount that would be needed to afford an annual 10-day holiday to Tenerife or Majorca.
The latest government figures show the average pensioner has an income of £12,792 – which is not enough to cover a holiday outside of the UK every summer, according to an analysis by the Pensions and Lifetime Savings Association (PLSA).
Financial experts say that a traditional holiday to the sea would require annual pension pay of £20,800 and savings of £399,000 to provide this total income with an annuity.
Basic Needs or Comfortable Retirement?
The PLSA report shows a single retiree needs £10,900 a year to cover all their basic needs and have enough left to cover a seven-day off-peak caravan trip to Norfolk or a five-day stay in Devon every year.
The PLSA said a “comfortable lifestyle” in retirement costs £33,600 a year and provides enough for multiple trips abroad as well as eating out and visiting the theatre regularly.
Those on this level of income would be able to afford a two-week all-inclusive cruise around the Mediterranean or even a two-week stay at an all-inclusive resort in Jamaica.
But when accounting for the current state pension, this retirement lifestyle would cost £856,000 to buy with an annuity.
According to pension provider Canada Life, it means that on top of the full state pension of about £9,600, a retiree would also need savings of £45,300 to cover the remaining £1,300 every year with an annuity to afford these luxe two-week annual holiday excursions on the sea.
With just a third of what is needed to afford trips abroad, surging energy prices, and no sign of inflation ebbing, unfortunately, most U.K. pensioners will have to divert their plans to staycations and choose alternative options for more affordable leisure time closer to home.
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not accept any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
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