The Pensions and Lifetime Savings Association (PLSA) has released its latest Retirement Living Standards update, revealing a notable decrease in the cost of a minimum retirement lifestyle, while moderate and comfortable standards have seen increases.

The changes are driven by lower energy prices and shifting public expectations on retirement income levels.

For a two-person household, the cost of a minimum retirement lifestyle has dropped to £21,600 annually, down £800 from previous levels, while a one-person household now requiring £13,400, a £1,000 reduction.

The decline is largely attributed to a significant fall in energy costs, with weekly domestic fuel budgets for a two-person household at the minimum level decreasing by £12.44 and by £8.82 for one-person households.

These savings reflect broader economic shifts, including lower energy prices, which have eased financial pressures for retirees at this level.

Zoe Alexander, director of policy and advocacy at the PLSA, said: “For many, retirement is about maintaining the life they already have not living more extravagantly or cutting back to the bare essentials. The Standards are designed to help people picture that future and plan in a way that works for them.

“Everyone’s situation is different, and contributions should be manageable. But if your circumstances improve, even small increases can make a big difference to your future.

“This year’s findings show that costs can go down as well as up. But planning matters more than ever. Whether you’re on your own or sharing your future with someone else, these Standards are here to help savers picture and plan their retirement – with real figures, real choices and real flexibility.”

The Retirement Living Standards, calculated by Loughborough University’s Centre for Research in Social Policy, are based on in-depth discussions with UK residents to define three retirement lifestyles: Minimum, Moderate and Comfortable.

While the minimum standard saw reductions, the moderate and comfortable standards have risen slightly due to inflation across various expenditure categories, though lower energy costs – down £16.74 and £15.38 per week for two- and one-person households, respectively – helped offset these increases.

Professor Matt Padley, co-director of the Centre for Research in Social Policy at Loughborough University, said: “Our research on what the public agree is needed in retirement at these three different levels continues to track changes in expectations, shaped by the broader economic, social and political context.

“The consequences of the cost-of-living challenges over the past few years are still being felt, and we’ve seen some subtle changes in public consensus about minimum living standards in retirement, resulting in a small fall in the expenditure needed to reach this standard. 

“In these uncertain times, planning in concrete ways for the future is ever more important, and the RLS help people to think in more concrete ways about what they want their retirement to look like, and how much they will need to live at this level.”

Public discussions also highlighted evolving expectations for the Minimum standard, with small adjustments in spending on clothing, hairdressing, technology, taxi use, and charitable giving. However, rail travel budgets increased, rising from £100 to £180 per person annually, reflecting higher fares and greater reliance on trains for longer journeys.

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This year’s update introduces new terminology, replacing “single” and “couple” with “one-person” and “two-person” households to better reflect modern retirement living arrangements.

A PLSA survey found that 75% of people live with family members, 22% live alone, and 3% share with non-family members. Looking ahead, 77% of non-retired individuals expect to live with someone in retirement, with only 12% preferring to live alone, signaling openness to shared living to reduce costs.

The RLS serve as a guide, not a rigid target, encouraging retirees to tailor plans to their lifestyles.

Alexander urges savers to consider pension contributions beyond the 8% automatic enrolment default, suggesting 12% or more for a better chance at their desired retirement.

Photo credits: Pexels

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Is your retirement plan on track? How would you even know?

I have only the vaguest idea of what my retirement looks like in pure financial terms – or even if its going to be enough.

I know roughly how much is in my pension pots. And I know how much I (and my employer) contribute each month.

This is a good starting point, but extrapolating what this means when you want to retire is the hardest part.

The good news is we’ve found rather a good tool for it!

This was the subject of this week’s Mouthy Money podcast. We were joined by Kevin Hollister, founder of www.guiide.co.uk to talk about how not to run out of money in retirement.

Kevin has developed Guiide as a nifty tool to help create a plan for your retirement income.

Inputting the variables of what you want (such as retirement age, if you want a tax-free lump sum etc) and what you currently have and contribute – and it will give you an indication of whether you’re on track.

It is modelled on the Pensions and Lifetime Savings Association (PLSA) Retirement Living Standards benchmarks.

Those benchmarks map out three variable retirement lifestyles and the consequent income needs to meet those ambitions. It is very interesting and worth a look.

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Pension shock and horror

For the purposes of the podcast episode with Kevin, I went through the Guiide process. The results made me nervous.

It showed me that with my ambitions as they stood, I would start running out of money after about five years.

The good news is the tool helps you to map what you can do in order to ensure you meet your goals.

Broadly though you’ll need to do one (or more) of the following:

• Lower your expectations
• Take more risk
• Find other assets (such as home equity)
• Contribute more to your pension

With minor tweaks to the first three – I was able to make my plans work, hurrah!

But the process really unlined for me the fact that my plan although it appears to work, is fragile.

A big market fall, a loss of income, stagnation in the housing market – or any other kind of risk – could seriously hamper these plans.

I recommend having a go at the tool – it is quite enlightening.

As we say time and again now – have a plan, make a plan! Don’t stick your head in the sand!

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The Government has set out initial plans to combine the small pension pots – with a value of under £1,000 – into larger accounts in order to ensure people don’t lose track of their workplace pensions.

It says the reform will leave pension savers around £1,000 better off thanks to savings made to charges on the small pots. 

The issue emerges when people work for companies for a short time and then move on. The company will open a workplace pension for them, but it isn’t added to for very long.

For people who move often, this can create a situation where they have a multitude of pensions with more than one company, with small amounts in them.

This is potentially expensive and inefficient. The Government now plans to automatically combine these small pots in order to save workers and the pensions industry money, time and complexity of managing so many accounts. 

Minister for pensions Torsten Bell comments: “It’s great news that more people are saving for their retirement. But I want to make pension saving as simple and rewarding as possible.

“There are now more small pension pots in the UK than pensioners – raising costs and hassle for workers trying to track their savings. It also costs the pensions industry hundreds of millions of pounds every year. 

“We will automatically bring together people’s small pots into one high performing pension, reducing costs as well as hassle for savers. In time this could boost the pension of an average earner by around £1,000 as part of our Plan for Change to put more money in people’s pockets.”

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The Government says there are some 13 million small pension pots that will be affected by this reform. It currently costs the pensions sector £225 million a year to administer these pots – a highly wasteful situation.

Zoe Alexander, director of policy and advocacy at the Pensions and Lifetime Savings Association (PLSA), comments: “The accumulation of small pots creates unnecessary cost and complexity for savers and schemes alike. The PLSA has worked extensively with industry and the DWP to propose solutions and supports the model being proposed by the Government.

“We look forward to working on delivering the recommendations of the Small Pots Development Group and are pleased the Government is tackling this long-standing issue in the Pension Schemes Bill.”

The plans are in the initial stages. The scheme to transfer small pots is due to take effect from 2030. 

Jon Greer, head of retirement policy at Quilter comments: “The Government’s move to prompt consolidation of small workplace pension pots is a much needed tidying up exercise, coming 13 years after the start of pensions auto enrolment. 

|As working habits have evolved, people frequently change jobs, leaving behind a trail of small pension pots. This unintended consequence can make retirement saving complicated and may cost savers money.

“If you have multiple small pots, you could be paying unnecessary administrative costs. Additionally, some providers may offset their losses by charging higher fees on larger pension pots, meaning you could be cross-subsidising the costs associated with managing smaller pots. 

“Consolidating your small pots can save money and simplify your retirement planning. It reduces the administrative burden of managing multiple pots and minimises the chance of lost pension pots. This reform is a significant step towards ensuring that workplace pensions work harder for savers.”

Photo by cottonbro studio

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Financial advice has a reputation for being largely inaccessible to young people. But do you even need it with a wealth of financial information available online? Mouthy Money investigates.

In an era of rising living costs, shifting job markets, and economic uncertainty, the question of whether young people – those under 45 – should seek financial advice is more relevant than ever.

For many in the UK, money management is a DIY business, with budgeting apps and online forums stepping in where traditional guidance once stood.

Yet, as financial decisions grow more complex and consequential, the case for getting professional financial advice does grow.

This feature explores what financial advice entails, when it’s worth seeking, its potential drawbacks, and the persistent “advice gap” that leaves many young Brits underserved.

What is financial advice?

Financial advice is a professional service aimed at helping individuals manage their long-term wealth more effectively.

Delivered by qualified, regulated financial advisers, it goes beyond generic tips or casual suggestions from friends.

Advisers assess your personal circumstances such as your income, debts, goals, and risk tolerance and provide tailored recommendations. These might include investment strategies, pension planning, mortgage options, or tax-efficient savings schemes such as ISAs.

In the UK, financial advisers must be regulated by the Financial Conduct Authority (FCA), ensuring they meet strict standards of competence and ethics. If you meet an adviser, they should be listed on the FCA’s register.

Advice can be ‘independent,’ covering the full market, or ‘restricted’, focusing on specific products or providers.

For young people, who may be navigating their first big financial milestones, this bespoke guidance can clarify a maze of options, whether that’s buying a home, starting a business, or planning for retirement decades away.

Mouthy Money spoke to a professional financial planner to get some insights into when a young person might need advice.

Katrania Lowers, a financial planner at Colmore Partners, explains: “Financial advice for young people is often misunderstood as something you only need ‘when you’re older’ or ‘when you’re rich’.

“But the reality is, the earlier you get clarity, the more control you have – especially at key moments like receiving an inheritance, coming into significant income, or starting a business.

“These are important points where the wrong move can be costly, and the right one can set you up for long-term security.”

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When should young people get financial advice?

For many under-45s, financial advice might seem like a luxury reserved for the wealthy or older generations.

Yet, certain life events and circumstances make it not just useful, but essential. Here are some key situations where seeking advice can pay off:

1. Inheritance

Receiving a lump sum, whether from a grandparent’s estate or a family windfall, can be overwhelming.

A 30-year-old inheriting £50,000 might wonder whether to invest it, pay off student loans, or save for a house deposit. But Lowers points out that mistakes are often made by young people who leave it too late to seek advice on inheritance.

Lowers explains: “People often think advice should come after the money lands. But in reality, the most powerful advice happens beforehand – when there’s time to understand the responsibilities that come with wealth, not just when it finally lands in their lap.

“Inheriting assets can be emotionally and financially complex, and without guidance, people risk making poor decisions or missing important planning steps – especially around tax, investing, or preserving family wealth.”

An adviser can map out tax implications (like inheritance tax thresholds) and suggest growth-oriented options, ensuring the money works harder over time.

Lowers adds: “Inheritance is seldom just about the money. It’s about stewardship. If someone doesn’t feel confident or equipped when they become a custodian of family assets, it can lead to stress, guilt, or worse – mismanagement.

“Getting advice early gives young people the language, tools and mindset to make thoughtful choices when the time comes; and having access to the wider family planner, who they already know and trust, means there’s already a sounding board in place when those imminent decisions need to be made.”

2. Business success

Young entrepreneurs are a growing force in the UK, with start-ups thriving in tech, creative industries, and beyond.

A 35-year-old who’s turned a side hustle into a £500,000-a-year business faces unique challenges: managing cash flow, structuring investments, or planning an exit strategy.

Financial advice can help balance personal wealth with business growth, while navigating tax reliefs such as Entrepreneurs’ Relief.

This can also be relevant for someone who isn’t necessarily an entrepreneur, but maybe joined a very successful business at an early stage and received some remuneration in the form of shares in the business.

3. Employment success

High earners – think City bankers, tech professionals, or NHS consultants in their early 40s – often juggle hefty salaries with big responsibilities.

A parent earning over £100,000 can face significant tax hurdles, especially given that marginal tax rates soar above this income level.

They might need advice on maximising pension contributions, mitigating income tax, or diversifying investments beyond a workplace scheme.

4. Other milestones

Life doesn’t wait for middle age. Buying a home, starting a family, or even planning a career break can benefit from expert input.

Financial advice doesn’t just cover investments and pensions. Mortgage advisers and insurance brokers are both services that young people can call on at key moments in their lives.

The former are one of the most popular routes when it comes to finding a mortgage for buying a home.

The latter can provide key help when someone is considering life insurance, income protection and other insurance options.

Lowers agrees with this sentiment: “Advice for young people doesn’t always have to be formal or product-led. Often, it’s about education or even just a safe space to ask ‘basic’ questions.

“For most young people, especially those still building their financial base, the right kind of advice might look more like a gentle steer – helping them understand pensions; why protection is important when they take out a mortgage, start a family or get a job; or how to use their money as a tool rather than something that disappears every month.”

In short, financial advice isn’t just for the grey-haired.

Whenever money gets complicated – or the stakes get high – young people stand to gain from a professional steer.

The drawbacks of financial advice

Despite its benefits, financial advice isn’t a silver bullet, and for many under-45s, it comes with major hurdles that make it less appealing.

Here’s why it might not always fit:

Cost: Advice doesn’t come cheap. Fees can range from £75 to £250 per hour, with comprehensive plans costing £500 to £2,000 upfront.

Ongoing advice might carry a percentage charge – typically 0.5% to 1% of your assets annually.

For a 32-year-old with £20,000 in savings, paying £200 a year might feel disproportionate, especially when free resources exist. However, doing it DIY does come with its own risks as you’ll be making decisions without personalised input from a professional.

Minimum net worth barriers: Many advisers target clients with significant wealth – say, £100,000 in investable assets – leaving younger people with modest portfolios out in the cold.

A 25-year-old with £5,000 in a Stocks and Shares ISA will struggle to find an adviser willing to take them on, as the fees wouldn’t justify the time spent.

This exclusivity can make advice feel elitist, rather than accessible.

Trust and complexity: Some young people hesitate because they don’t trust advisers (memories of mis-selling scandals such as PPI linger) or find the process intimidating.

Others worry about being pushed into products they don’t need, such as costly insurance policies.

And for the digitally savvy, the rise of robo-advisers – cheaper, algorithm-driven alternatives – can seem a more appealing fix than face-to-face meetings.

These drawbacks highlight a tension: while advice can be transformative, its structure often caters to older, wealthier clients, not the cash-strapped or early-career crowd.

The advice gap

This mismatch feeds into a broader issue known as the “advice gap”. This is the divide between those who need financial guidance and those who can access it.

For young people, the gap is stark. A 2023 FCA survey found only 8% of UK adults under 45 had sought regulated financial advice in the past year, compared to 20% of over-55s. Cost, awareness, and a lack of tailored services were cited as key barriers.

The implications are serious. Without advice, young people risk under-saving for retirement (exacerbating the UK’s pension crisis), mismanaging windfalls, or missing out on tax breaks.

Lowers says the real challenge is access: “Many don’t know where to go or assume they can’t afford it – which feeds into the advice gap. If we want to change that, we need to make financial advice or guidance more accessible, more flexible, and more in tune with the reality of someone navigating first-time milestones, not just six-figure portfolios.

“Financial coaching is becoming more and more popular, and I can see why. It offers guidance in which AUM doesn’t matter and the ability to meet minimum initial or ongoing fees isn’t even a consideration – it appeals to the wider population, including younger people. Whilst it isn’t advice, I do believe this will start to bridge some sort of gap.”

The rise of ‘finfluencers’ on TikTok and Instagram – some offering dubious tips – further muddies the waters, filling the void with unregulated noise.

So, what’s being done? The UK Government and regulators are stepping up. The FCA’s 2022 Consumer Duty rules push advisers to prioritise clients’ needs, making services more transparent and outcome focused.

Meanwhile, the Money and Pensions Service (MaPS), a Government-backed body, offers free guidance through Moneyhelper, targeting younger audiences with tools such as pension calculators and debt advice.

Innovations such as ‘simplified advice’ are also growing. In 2024, the FCA proposed lighter-touch models – think low-cost, digital-first advice for basic needs such as ISAs or small investments.

Firms including Wealthify and Nutmeg already offer ‘robo-advice’ at a fraction of traditional upfront fees.

Yet, progress is slow. Closing the gap requires more advisers but the UK has just 28,000, down 10% since 2015.

Better financial education in schools, and a cultural shift to see advice as a young person’s tool, not a retiree’s privilege.

To seek or not to seek?

For young people under 45, financial advice isn’t a one-size-fits-all solution. If you’re navigating a windfall, scaling a business, or earning big, it can be a game-changer, offering clarity and long-term security.

But for those with tighter budgets or simpler needs, the costs and barriers might outweigh the perks – especially when digital tools and free resources abound.

The advice gap remains a sticking point, and while regulators and the Government are chipping away at it, young Brits must weigh their options carefully.

Ultimately, the decision hinges on your circumstances, goals, and willingness to invest in your financial future. In a world of uncertainty, a little expert help might just be the edge you need – or a cost you can skip until the stakes rise higher.

Photo credits: Pexels

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What do you want from your retirement? It’s a big question. The younger you are, the harder it might be to have a clear picture in your head.

There are plenty of stock responses we’re all probably conditioned to consider:

• “Take a cruise!”
• “Travel the world!”
• “Buy a house with a sea view!”
• “To the Lamborghini show room!”

But retiring plans don’t have to be ambitious. Having a plan, or at least a vague idea, is worthwhile though.

For my part, I have an image of a comfortable (and easy to maintain) country cottage, with a patch out back big enough for some chickens (and a labrador).

A nice study with a leather chair where I can read and write (and probably fall asleep in) with a cosy fireplace.

In short, I want somewhere quiet, self-sufficient and sustainable.

I love to travel, visit new places and learn about new cultures. But truly, I don’t think I want to have to do that when I’m 70.

I want to take my son to these places and open his eyes to the wide world out there while he’s still young. And I want to be able to do things while I’m still spritely enough to enjoy them too.

What does that mean in practice? It means I don’t have to be so hard on myself while I’ve still got something like youthful vigour. I have very little interest in living in penury in order to maximise my cash pile when I’m geriatric.

All too often, the message is rammed down our throats by financial services and Government alike that we need to plan for infinitesimal retirements where we could live to be 150 and need barrels of money to keep us going. But it’s not true.

What you need is a plan and a sustainable way to achieve that without making your life a total misery.

And once you reach some of those goals (or at least, the financial equivalents therein), you need not be so worried about using the resources you’ve built to actually go out and have the life you want to live.

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This was the subject of this week’s podcast with guest Dan Haylett. Dan has some very enlightening views on why people should actually set out to enjoy their hard-earned wealth instead of sitting on a pile of gold coins like old Tolkien’s Smaug.

But if for nothing else, the problem with sitting on all that money forever is financial firms love it because they can keep charging fees, while the Government loves it because you’re not their problem if you take care of yourself (despite the fact your taxes paid for others to enjoy those same benefits today).

I really loved Dan’s suggestion in our podcast catch up that you should break the journey down into much smaller steps. Where do you want to be in nine years? What about three? Keep pushing forward but don’t let the horizon be so far off that it seems like you’ll never get there.

Make a plan. It doesn’t have to be exact, but have one. Even if it’s just a general direction of travel, so to speak. Future you will thank you. My future chickens, Henrietta, Mildred and Prudence will thank me too.

Photo credits: Pexels

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“Decumulation” is a term used in personal finance to describe the phase where an individual starts to withdraw and spend the money they have saved during their working years.

This period begins after retirement when regular income from employment stops. 

During the accumulation phase, people focus on saving and investing their income to build a financial reserve.

In contrast, the decumulation phase involves careful planning to ensure that these savings last throughout retirement.

This planning includes estimating living expenses, managing withdrawals to balance income needs and capital preservation, and considering tax implications. 

Ask our experts your money questions

Effective decumulation strategies are crucial for maintaining a desired lifestyle in retirement and managing risks like market fluctuations, longevity, and healthcare costs. 

Photo credits: Pexels

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When was the last time you read the terms and conditions jargon for a financial product you bought, or signed up for?

I’ll be honest for my part – it was probably when my wife and I got the mortgage to our first home. I did it because it felt like a big deal. A huge long-term commitment.

But for the rest of it? Nah. F**k it. I’m sure it says what it should say etc. The regulator or Ombudsman have got my back. Right?

The answer to that is, well, possibly. But we still assume a significant amount of risk on our own finances by signing up to products we potentially don’t know the full function of.

Were something to happen, and you take your case to an adjudicator, then not having read the Ts&Cs is no defence.

But the problem here is that many financial firms make their documents so difficult to read and digest that we simply switch off from them. So who’s to blame?

It would be easy to blame financial companies for deliberately obfuscating but it is potentially a bit more nuanced than that.

This was the nub of the discussion I had with my excellent guests on this week’s Mouthy Money podcast.

I was joined by James Daley, founder of ratings and consumer group Fairer Finance, and Robert Vaudry, chief customer and investment officer at Wealthtime, to take a deep dive into the world of financial jargon, retirement language and regulatory change coming for financial firms who don’t explain their products in simpler terms.

Financial firms exist under very specific regulations laid down by the FCA and the Government. Often in order to comply with such rules, firms bend over backwards to get their information right. This, unfortunately, means getting the lawyers in to aim for precision and legal compliance.

This comes at the cost of easy understanding, typically.

Read more from Edmund Greaves on Mouthy Money

Winds of change

The winds of change are however blowing for the rule of financial jargon in Britain. The new Labour Government has made noises about simplifying much of the process around communicating information.

This comes on the back of Consumer Duty – a wide-ranging new set of rules designed to make financial firms consider their customers before anything else.

The hope then is that companies will dispense with the ludicrous verbosity of their Ts&Cs and focus on delivering the important facts in the simplest way possible to the people who need to understand it the most.

You can listen to the full episode with James and Robert on all our podcasting channels (Apple Podcast and Spotify) or watch the full thing on our YouTube channel.

Photo by Pixabay

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The state pension will rise to around £11,501 a year next April thanks to record wage growth.

Pensioners are in line for another bumper increase thanks to the triple lock guarantee which dictates that the state pension should increase each year by the equivalent of inflation, wages or 2.5% – depending on which is highest.

The latest wage data from the Office for National Statistics (ONS) showed wages were rising by 8.5% including bonuses in the three months to July.

Steven Cameron, pensions director at Aegon comments: “Today’s official earnings growth figures mean state pensioners are on target for an inflation-busting 8.5% increase next April.

“With any breaking of the triple lock commitment vanishingly unlikely so close to a General Election, this should mean someone on the full new state pension of £10,600 a year will see their income increase by £901 to £11,501 or £221.17 a week. The government typically gives official confirmation around November.”

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As this is higher than the current rate of inflation then retirees will enjoy another bumper raise to their state pension benefit. It means the government will have to find an extra £2 billion to make the payments.

In 2022 pensioners got a 10.1% uplift thanks to rocketing inflation. The bumper rises in the state pension have increased criticism over the fairness of the triple lock, particularly in 2022 when working age people weren’t seeing such generous pay rises.

Cameron adds: “The triple lock has been on a wild ride in recent years due to the high level of volatility in the economy and the unpredictability of both inflation and earnings growth.

“Looking ahead, all eyes will be on party manifestos to see what commitments are made for the next five years, something Rishi Sunak refused to comment on last weekend.

“The huge popularity of the triple lock amongst pensioners is balanced by the huge cost of funding it, which is met by the current National Insurance contributions of today’s workers.

“All parties must find a way to balance the books. One fairer and less unpredictable option would be to move away from a year-on-year comparison of earnings, inflation and 2.5% to one which averages out across say three years.”

However the 8.5% hike is not guaranteed according to Cameron. The annual increase is typically taken from September data but the government has to confirm it officially still, which usually happens in November.

Photo by Anna Shvets

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I think I drew this back in 2003 as part of my Pensions Conversations series of cartoons. It features two of my regular characters from back then, Emma Leaven and Neville Rebel. 

It concerns something I didn’t think many people appreciated at the time. I don’t think many people really understand it these days either if I’m being honest…

Here’s another one from way back in 2007. The ‘crises’ outlined here were ‘solved’ a decade later with the introduction of Automatic Enrolment, but at the cost of scrapping the State Second Pension (aka S2P – the state pension previously known as Serps…).

Here’s another one of my Pensions Conversations comic strips from, I think, 2006. It features my then new characters, PensionsGuru and Mrs Guru.

This one’s from 2006. I drew it after having a coffee with a personal finance journalist at the M-Bar in Leadenhall Market (I did a lot of my cartooning there in those days).

It more or less sums up the conversation we’d had about the so-called special agreement that the politicians of the time had come up with.

Quite important these days I think to remind ourselves just why the pensions triple-lock was eventually introduced.

This one’s interesting in that I drew it in 2007 and some people have since pointed out to me that it in some way predicted the rise of the Waspi movement.

I don’t think that’s the case, nor anything like it, but I do think a state pension system with such poor outcomes for half the population should never have been acceptable to us.

When I drew this in 2008 I thought it was quite funny. These days I’m not so sure…

Another one from 2008 that would probably still be relevant in 2058.

Here’s another one that’ll be just as true in 20 years time as it was 20 years ago when I drew it…

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From wages rises fuelling inflation, to over-50 pandemic retirees being ‘much poorer’, and the upside of generation rent – here are our favourite must know money stories this week to help you get your head around your personal finances. 

Wage rises fuel inflation, as real pay falls behind 

Regular pay grew by 7.3% between March to May 2023, according to the Office for National Statistics (ONS) equalling the record growth rate set last month. But with inflation currently at 8.7%, real pay is still lagging in real terms. 

The increase has put further pressure on the Bank of England to continue hiking rates in its attempt to slow price increase and cool the economy. Concerns over strong wage growth remain as it feeds consumer demand and further forces companies to increase the prices of their products – a so-called wage price spiral.  

While a higher wage means you have more money to spend out of your pocket, it is certainly not keeping up with inflation either – regular pay fell by 0.8% overall, after accounting for inflationary impact. 

Sarah Coles, head of personal finance, Hargreaves Lansdown comments: “Somehow, pay is simultaneously too high for the Bank of England’s liking, and yet too low to keep up with inflation.” 

The Bank faces the challenge of carefully working around the tight labour market to end the vicious cycle of inflation and rate rises without hurting the incomes and employment of UK households.  

She added: “It’s likely to mean both that interest rate rises are on the cards, and that more interest rate rises could well exacerbate growing weakness in the jobs market.”  

The upside of generation rent 

Amid turmoil in the housing market, “renting is largely risk and responsibility-free, unlike owning a property,” writes Ben Wilkinson for in The Telegraph. 

While today’s tenants feel the squeeze of the sharp rent rises and competition in the property rental market, things are not quite rosy for landlords and homeowners alike.  

Many have stretched themselves to get on the ladder at the peak of the market – and are now facing punishing mortgage rises, the burden of monthly payments and commitment to decade long contracts, along with the threat of the housing market crashing down. 

On the other hand, renting is risk and responsibility free, according to Wilkinson. Renters have short-term contracts and no maintenance responsibilities – giving them the ability to move easily to access better opportunities in different locations.  

While renters are not immune from surging housing costs and there is a need for better regulation to root out unfair landlords – in the current situation with wobbling house prices, the heavily-mortgaged might wish they were renting.  

Over-50s pandemic retirees are ‘much poorer’ 

People over 50 who left work during the pandemic are “much poorer” in general than other retirees, reports Jemma Dempsey for BBC News. 

Research from the Institute for Fiscal Studies (IFS) shows that 48% of those who retired in 2020-21 were now living in relative poverty. The report found that they cut their food spending by £60 per week on average and nearly half of them had no access to either private or state pensions.  

Older workers between the ages of 50 and 70 who left in the first year of the pandemic were “not retiring in comfort”, the IFS said, compared with those who had retired even just a year earlier.

The study noted that older people who stop working often never re-enter the workforce. “This group may be experiencing long-term poverty and greater hardship in the current cost of living crisis,” it said. 

Chancellor Jeremy Hunt has made it a goal to encourage the over-50s back into the workplace.  

“We have recently committed £70m in back-to-work support for the over-50s including a new online Midlife MOT launched this week,” a spokesperson said. 

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