Retirement Living Standards 2022 update published, showing the largest annual increases since the RLS began

The Retirement Living Standards (RLS) for 2022 were published in November 2022 by the Centre for Research in Social Policy at Loughborough University for the Pensions and Lifetime Savings Association¹. The RLS set out three budgets for single and partnered retirees, covering the expenditure needed to reach a minimum, moderate or comfortable standard of living¹. The 2022 figures update the 2021 budgets using the Consumer Prices Index for the year to April 2022, when CPI rose by 9%¹.

The report states that the annual increase in what is needed to reach each level over the last year is by far the largest since the standards were first established in 2019¹. Domestic fuel was repriced across all three standards rather than uprated by CPI, because the cap previously in place ended and a new higher cap was introduced in April 2022, raising daily standing charges for gas and electricity and prices per kilowatt hour¹. Water rates were also repriced across all three standards¹.

The percentage changes in the weekly budgets for single retirees, and the cash changes for partnered retirees, are set out in the report as follows¹:

The report also gives the equivalent figures for partnered retirees as percentage changes of 19.0% for the minimum standard, 10.9% for moderate and 9.6% for comfortable¹. The minimum standard was rebased in 2022 through new research with groups of members of the public across the UK, rather than uprated by inflation alone¹. The report says the amount included in a minimum budget for food, eaten in and outside the home, increased significantly, partly because of price rises and partly because eating out is no longer seen as a special activity¹. It also says the method for building the food basket was revised to reflect higher average weight and height in the UK population and more sophisticated nutritional analysis software, so the basket contains more items than before¹.

The report notes that the suspension of the triple lock meant the state pension did not keep pace with inflation, and that it remained unclear whether the triple lock would be reinstated or remain frozen for another year¹. It adds that the minimum standard is produced through ongoing Minimum Income Standards research funded by the Joseph Rowntree Foundation, while the moderate and comfortable standards come from discussion groups of eight to ten people aged over 55 from mixed socio-economic backgrounds¹.

Why it matters for households

The RLS are used across the pensions industry to help savers compare what they will need in retirement with their projected pension income¹. The 2022 update means the income the public associates with each of the three standards is higher than a year earlier, and for the minimum standard the increase of 17.8% for a single retiree and 19.0% for a couple is larger than the 9% rise in CPI over the same period¹. Because domestic fuel was repriced rather than uprated, the fuel element of every budget reflects the April 2022 cap change directly¹. The report describes the wider backdrop as inflation at its highest rate in 40 years, with the cost of essentials and domestic fuel soaring and pressure on both working age and retired households¹. Anyone comparing their own pension pot or expected retirement income against these figures is comparing it with budgets that have moved by more than general inflation.

What happens next

The RLS will be rebased in 2023, meaning the research starts from scratch with groups of members of the public to establish what the public agree is needed for a moderate and a comfortable standard of living in retirement¹. The report does not state a date for publication of the 2023 standards.