How much do I need to retire in the UK? is becoming a popular question in today’s climate.
Deciding when to retire is a personal decision, but affording the lifestyle you want in retirement depends on how much you’ve saved.
And yet, a 2024 survey by Which? revealed that over half of non-retirees (51%) don’t know how much money they’ll need for a comfortable retirement.
As Independent Financial Advisers, we help clients answer this very question: how much do I need to retire in the UK, not just to get by, but to live the life they’ve worked hard for.
What Kind of Retirement Lifestyle Do You Want? To Retire in the UK?
To make things clearer, the Pension and Lifetime Savings Association (PLSA) has outlined three tiers of retirement lifestyles:
| Lifestyle | Single-person | Two-person household |
|---|---|---|
| Minimum | £13,400 | £21,600 |
| Moderate | £31,700 | £43,900 |
| Comfortable | £43,900 | £60,600 |
(Source: PLSA, June 2025)
Retiring in the UK: Where Will Your Retirement Income Come From?
1. State Pension
As of 2025–26, the full new State Pension is £230.25 per week, or around £11,973 a year. You’ll get this at age 66 (rising to 67 by 2028), provided you have at least 35 years of qualifying National Insurance contributions.
2. Final Salary (Defined Benefit) Pension
If you’re lucky enough to have one of these, it provides a guaranteed income based on your salary and years of service. You should receive annual statements to help you track progress.
3. Defined Contribution Pension
These are now the most common. You and your employer contribute, and the money is invested. The amount you receive depends on your contributions, investment performance, and how you access the pot, via drawdown, annuity, or lump sum.
How Much Do I Need to Save?
To meet the PLSA’s moderate retirement standard, here’s what you’ll need in savings (assuming you get the full State Pension):
| Household | Income target | Needed (Drawdown) | Needed (Annuity) |
|---|---|---|---|
| One-person | £31,700 | £375,600 | £312,600 |
| Two-person | £43,900 | £381,800 | £317,700 |
For a comfortable lifestyle, those numbers rise:
| Household | Income target | Needed (Drawdown) | Needed (Annuity) |
|---|---|---|---|
| One-person | £43,900 | £609,270 | £505,000 |
| Two-person | £60,600 | £697,500 | £578,000 |
Note: Drawdown figures assume 20 years of withdrawals starting at age 65, 3% annual growth, 1% annual inflation, and 0.75% annual charges. Annuity rates are based on a healthy 65-year-old as of June 2025.
Read what you need to know about the rising state pension age
When Should You Start Saving?
The short answer? As early as possible.
Thanks to pension tax relief, every £100 you contribute only costs a basic-rate taxpayer £80. Over time, with investment growth, this can significantly increase your retirement pot.
Under auto-enrolment, the minimum total contribution is 8% of your qualifying earnings (5% from you, 3% from your employer). But if you can afford to contribute more, and many employers will match extra contributions, it’s a smart move.
What’s the Average Pensioner Income?
According to the Department for Work and Pensions, the average weekly income for pensioners in 2023–24 was:
- £407 overall
- £595 for couples
- £282 for single pensioners
That’s a drop from previous years, highlighting the importance of supplementing your State Pension with private savings.
Final Thoughts
Whether you plan to retire at 60 or 70, understanding your likely expenses and income sources is crucial. You can use the PLSA benchmarks as a guide, but please speak to an Independent Financial Adviser to get tailored advice.
With the proper planning and regular reviews, you can afford the retirement you want.
Please reach out to us today to talk about whether you are on target for what you want.
