“How much do I need to retire?” is the question we hear more than any other, and the honest answer is: it depends on the retirement you want. But “it depends” isn’t much of a plan, so here is a plain-English way to work out your own number, and the steps that make it achievable.
1. Start with the life, not the number
Retirement isn’t one fixed thing. For some it’s travel and eating out; for others it’s time with grandchildren and the garden. Independent research by the Pensions and Lifetime Savings Association (PLSA) describes three broad living standards, minimum, moderate and comfortable, and puts an annual income figure against each. The exact figures are updated regularly, but the idea is the useful part: decide what your version of “comfortable” actually looks like, then cost it.
2. Count everything you’ll have coming in
Your retirement income is usually a blend: the State Pension (for many people a foundation of roughly £12,000 a year at today’s full rate, depending on your National Insurance record), workplace and personal pensions, and possibly savings, investments or property income. Get a State Pension forecast at gov.uk, and dig out statements for every pension you’ve ever had, people often forget pots from old jobs. The government’s free Pension Tracing Service can help find lost ones.
3. Mind the gap
Compare the income your savings may provide with the cost of the retirement you want. If there’s a gap, you have levers: save more now, retire a little later, adjust the goal, or make your existing pensions work harder. Small changes made early can have a big effect, because contributions benefit from tax relief and time invested, though remember that investment growth is never guaranteed.
4. Understand how you’ll take the money
From age 55 (rising to 57 from April 2028), most people with defined contribution pensions can choose how to draw on them: a flexible income (drawdown), a guaranteed income for life (an annuity), lump sums, or a combination. Usually up to 25% can be taken tax-free, with the rest taxed as income. Each route has trade-offs, flexibility versus certainty, and the risk of taking too much too soon. This is where personal advice earns its keep.
5. Don’t plan for a fixed 20 years
A 65-year-old today may well spend 20 to 30 years in retirement. Costs also change shape over time, often higher in the active early years, lower in the middle, and rising again if care is needed later. A good plan flexes with those phases rather than assuming one flat income forever.
6. Review it, life and rules both change
Pension rules, tax allowances and your own circumstances all move. A plan reviewed regularly stays a plan; one left in a drawer becomes a guess. We sit down with our clients to keep their retirement plans on track as things change.
Frequently asked questions
What is a comfortable retirement income in the UK?
Research such as the PLSA’s Retirement Living Standards suggests a single person may need roughly £43,000 a year for a comfortable retirement, and a couple around £60,000, but the figures are updated regularly and your own number depends entirely on the lifestyle you want.
How much should I have in my pension by age 50?
There is no single right answer, it depends on the retirement you want, your other assets and when you plan to stop working. A rule of thumb some use is several times your salary by 50, but a personal calculation is far more useful than any rule of thumb.
When can I access my pension?
Most defined contribution pensions can currently be accessed from age 55, rising to 57 from April 2028. The State Pension starts later, currently 66, rising in stages.
Is the State Pension enough to retire on?
For most people, no, the full new State Pension provides a foundation of roughly £12,000 a year, which sits below most estimates of even a minimum living standard for many households. Private and workplace pensions usually need to do the heavy lifting.
Want to know your own number?
Bring your pension statements to a free, no-obligation chat with Laurence Gould or Kealy Ball and we’ll help you see where you stand, and what your options may be. No jargon, no pressure.
Book a meeting with Laurence or KealyImportant: This article is general information, not personal financial advice. What is right for you depends on your individual circumstances. The performance of your investments is subject to risk. Its performance may fluctuate based on movements in the market and economic conditions. Capital is at risk. Currency movements may also affect the value of investments. You may get back less than you originally invested. Past performance is not a reliable indicator of future performance. Tax treatment is based on an individual’s unique circumstances and may be subject to change. A pension is a long-term investment; accessing benefits early can reduce the amount available later. Figures quoted (such as State Pension amounts and research-based living standards) are correct at the time of writing and change over time. For advice tailored to you, please get in touch. [DRAFT, financial promotion to be approved by Julian Harris Adviser Network compliance before publishing.]