While an excellent discussion of how to improve the income people get from saving for a pension was taking place with Jonathan Stapleton, a range of commentators were lining up to bemoan the ignorance of the public.
The Pensions UK report gave licence to financial reporters to run stories about the impending crisis facing most of us
There will of course be a few Times readers staring at the picture above and smiling with the couple. The numbers have been advertised on this blog this week, but here they are again
A comfortable lifestyle is even harder to achieve, with just 9 per cent of savers on track for the £45,400 a year post-tax income required, according to Pensions UK said. This figure was up from £43,900 last year. A couple would need £62,700, up from £60,600.
The comfortable income would allow £78 a week for food, £22 a week for takeaways, a three-year-old small car replaced every five years, and a two-week four-star holiday in the Mediterranean, as well as three long weekends within the UK.
Someone hoping for this level of retirement would need a pension pot of £845,000, assuming they used it to buy an annuity, combined with the state pension.
The article I kicked off with is from Holly Roach of Professional Pensions and contains laments over our lack of saving from the Work and Pensions Select Committee’s Debbie Abrahams. I hope she will look closely at how our saving could be more efficient. The Department of Work and Pensions last autumn claimed that CDC could push pension income up by up to 60%. What with the positive impact of the triple lock, the Government’s story is positive.
You wouldn’t think it reading what follows from WTW and LCP – (pension consultants) or from insurers including Standard Life, Legal & General and Royal London. Lawyers Travers Smith point out that the forthcoming Pensions Dashboard will make the state of our retirement finances only too obvious. The Times finishes with comments from the insurer Fidelity.
Why aren’t we all pension millionaires?
As well as the annuity to buy us a lifetime income of £44K , we need the state pension (worth at least £250,000 as its price to buy through an annuity broker). So the pension millionaire will be comfortable with a 4 star holiday, a small car and a couple of breaks in the UK to while away retirement.
We aren’t all pension millionaires because – unlike countries like the Netherlands where replacement income in retirement is 80% of working pay, we don’t take pensions seriously.
We think that DC pots can substitute for a lifetime real pensions (“real” meaning inflation protected).
Despite the plethora of brains on display in these two articles there is no admission that the reason we’ll be skint in retirement is the fault of the people quoted. It is obvious to the general public that those who have been tasked to do the best with the money we give them , have failed to turn their contributions to pensions.
The reality is not as the pension adverts show us. Those two folks smiling as they look at the laptop are not representative of those reaching pension age, well not the ones I know.
So long as we blame savers for their lack of foresight, we ignore the harsh reality that we’re selling pots as pensions. So long as we let people think their pot is their pension, many of us will continue to be deluded into thinking that the adverts are right.
One of the major problems is national productivity. This needs a solution urgently.
Many people do not have these income levels during their working lives let alone at retirement. For that we have foodbanks. Asking this group to contribute more to pensions is an insult.
There is an assumption that enhancement in design of pensions will translate into higher pensions. Based on past experience there is more chance that it will be applied to reduce contributions.
It is a pu lic holiday so more time with reading today.
This latest set of figures from the Office for National Statistics (ONS) show:
Overall UK household costs, as measured by the Household Costs Index (HCI), rose by 3.6% in the year to March 2026; this is the same inflation rate as seen in December 2025.Costs for low-income households (decile two) and high-income households (decile nine) increased by 3.7% and 3.5%, respectively, in the year to March 2026.
By tenure type, private renter households and social renter households each had the highest annual inflation rate of all tenure types, of 3.7% in the year to March 2026; both household types saw a decrease in the annual inflation rate since December 2025, from 3.8% and 3.9%, respectively.
Mortgagors and outright owner occupiers each experienced the lowest annual inflation rate of all tenure types, at 3.6% in the year to March 2026; mortgagor households saw a slight decrease, from 3.7%, while outright owner occupiers saw an increase, from 3.4%, compared with December 2025.
Non-retired households continued to experience a higher annual rate of inflation (3.7% in the year to March 2026) than retired households (3.6%); non-retired households remained the same, while retired households saw a slight increase, from 3.5%, compared with December 2025.
Costs for households with children grew by 3.5% in the year to March 2026, while costs for households without children increased by 3.7%, compared with 3.6% for both groups in December 2025.
By comparison, the headline CPI rate for March 2026 was 3.3%.
It was at the end of 2023 that the ONS first published a new set of household cost indices (HCIs) for the period from January 2022 to September 2023, tracking costs for households based on various characteristics:
Income decile (excluding top and bottom deciles);
Property tenure – private renter, social renter, mortgaged owner and outright owner;
Retired/non retired; and
With children/without children.
Households are grouped into deciles (or tenths) based on their equivalised disposable income on their equivalised expenditure. The richest decile (decile ten) is the 10% of households with the highest equivalised disposable income. Similarly, the poorest decile (decile one) is the 10% of households with the lowest equivalised disposable income. The highest-expenditure decile (decile ten) is the 10% of households with the highest equivalised expenditure. Similarly, the lowest-expenditure decile (decile one) is the 10% of households with the lowest equivalised expenditure. The second and ninth deciles are used to represent low- and high-income households; the first- and tenth-income deciles are omitted as the composition of these groups can be unusual and may be influenced by unrepresentative expenditures.
The ONS makes it clear that the HCIs were meant to complement their main indices, the CPI and CPIH, and as ‘official statistics in development’, should be used with caution.
Whereas the CPI and CPIH ‘shopping baskets’ reflect the total share of expenditure across all households in the UK (‘plutocratic’ weights), for the HCIs the weight of each component in a household group’s ‘basket’ is based on the average household’s share of expenditure (‘democratic’ weights).
One reason why the HCI weightings diverge further from the CPI is that the HCI also include changes in mortgage interest rates, stamp duty and other costs related to the purchase of a dwelling. These are excluded from CPI and estimated using equivalent rental prices in CPIH.
The ONS previously said that it aimed to update the weights in Quarter 2 (April to June) 2025, and in this release, it has used updated 2025 weights. This update has led to minor revisions in previously published comparisons. The HCIs have been updated using revised 2025 weights. This led to small changes in the all-households HCI. The only revision was in June 2025, with a decrease of 0.1 percentage points with the inclusion of the 2025 weights. Similar impacts were seen across all household groups. It adds that it has not been possible to update the weights for 2026 because of delays in processing the underlying survey data and the need for further quality assurance. Instead, the most recent estimates have been compiled using the weights for February to December 2025. It will update the weights as soon as the data are available to use.
Regular quarterly sets of HCI have been published since December 2023. Please see our earlier Bulletin regarding these earlier publications.