Usually, we tell you about various aspects of Armed Forces pension benefits but here we look at what a comfortable retirement might look like.
You have been paying National Insurance Contributions during your service and, if you pay 35 years’ worth of contributions, you will qualify for the full state pension which, for 2025/26, is £230.25 per week.
On top of this, providing you have given 2 or more years reckonable service (RS), you will have earned an Armed Forces pension. All of you who have 2 or more years RS will have AFPS 15 benefits and some of you will have benefits in AFPS 75 or AFPS 05. When you leave you will receive a statement setting out the amount of your pension award(s) and the ages at which they may be claimed.
So, on top of the above, what do you need to save?
According to the Retirement Living Standards website, retirement costs are estimated as:
- ‘Minimum’ Lifestyle – enough money to live on, plus entertainment and a holiday - £13,400 for one person or £21,600 for two. If there are two of you and you both qualify for the full state pension (almost £12k per year each) this minimum is achieved but without much wriggle room.
- ‘Moderate’ Lifestyle – extra security and money for more holidays and entertainment -£31,700 for one person or £43,900 for two.
- ‘Comfortable’ Lifestyle – enough money so you can cover most things you want to do – £43,900 for one person or £60,600 for two.
However, these figures are for costs rather than income – so they illustrate how much money is required after tax. Further, they assume that you own your home and have no mortgage. If this is not the case, you need to add in your rent or mortgage costs.
So, what is considered a ‘moderate’ lifestyle for a two-person household? Retirement Living Standards envisages for example:
- £104 a week for groceries
- £84 per week for eating out/take aways
- a small 3 year old car
- £22 per month on taxis
- £104 per year per person for rail fares
- an annual fortnight’s all-inclusive 3* holiday in the Med and an off-peak weekend break in the UK.
Study these assumptions (more examples appear on their website) and ask yourself whether this would suit your aspirations and, whether the costs they quote measure up to your own experience of the current cost of living.
The message from this article is that retirement is expensive and you need to think ahead and save to provide for the level of comfort and security that you want for yourself and your family.
Looking at ways to boost your retirement income? Read our previous article here
