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How much will I need to retire?
Work out if you're on track for the lifestyle you want when you stop working
When you stop working is up to you, but whether you can afford the retirement lifestyle you want all comes down to how much you've managed to save.
In a 2024 survey carried out by Which?, 51% of people yet to retire said they weren't confident how much money they'll need to deliver a comfortable retirement.
Here we'll give you get a better idea of how much money you'll need in retirement, and how much you'll need to save in advance to generate that income.
How much income should I aim for in retirement?
Saving as much as possible, as early as possible, into your private pensions will help put you in the strongest financial position for life after work. But it's hard to know exactly how much you should aim for.
The Pension and Lifetime Savings Association (PLSA) has developed three ‘retirement living standards’ to help address this problem. These reflect the amounts you’d need for a minimum, moderate and comfortable standard of living in retirement:
| Single-person household | Two-person household | |
| Minimum | £13,400 | £21,600 |
| Moderate | £31,700 | £43,900 |
| Comfortable | £43,900 | £60,600 |
Source: PLSA retirement living standards (June 2025). The figures shown reflect annual expenditure required to achieve each standard.
The targets for a person living alone might seem high compared with those for couples, but this reflects the fact that many costs – such as energy bills, broadband and home insurance – are virtually the same even if you live alone.
How far will my retirement income stretch?
Each of the PLSA's three retirement living standards is based on the actual cost of a basket of goods and services.
Here are the costs a two-person household could cover based on each living standard:
| Minimum (£21,600 a year) | Moderate (£43,900 a year) | Comfortable (£60,600 a year) | |
| House | DIY - £200 a year to maintain property | £500 a year to maintain property, £300 contingency | £600 a year to maintain property, £300 contingency |
| Food | £109 a week on groceries | £103 a week on groceries | £134 on groceries |
| £60 a month on food out of the home | £63 a week on food out of the home | £85 a week on food out of the home | |
| £24 a month on takeways | £21 a month on takeaways + £106 a month to take others for a meal | £32 a week on takeways + £105 a month to take others out for a meal | |
| Transport | No car | 3-year-old small car, replaced every 7 years | 3-year-old small car, replaced every 5 years |
| £30 a month on taxis | £22 a month on taxis | £22 a month on taxis | |
| £180 per year per person on rail fares | £104 per year per person on rail fares | £208 per year per person on rail fares |
Source: PLSA (June 2025)
Where will my retirement income come from?
A combination of the state pension and private pensions are the building blocks of most people's retirement income.
State pension
You'll qualify for payments when you reach 66, but this is scheduled to rise to 67 between 2026 and 2028.
In 2025-26, the full level of new state pension (for people who reach state pension age on or after 6 April 2016) is £230.25 a week (£11,973 a year), but not everyone gets that much.
- Find out more: how much state pension will I get?
Final salary pension
If you have a final salary (also known as defined benefit) pension, you’ll receive a guaranteed income, which is calculated based on your length of service and your earnings while you were working. Deduct tax and you should have a good idea how close you are to your target amount.
You should receive annual updates telling you how much you can expect to get.
Defined contribution pension
Defined contribution pensions are the most common type of private pension. You (and your employer, if it's a workplace scheme) pay money in, which is then invested.
The amount you get when you retire depends on how much you've contributed, how well the investments have performed, and how you decide to access your pot.
Your options for accessing this money are:
- Buying an annuity, which guarantees an income each year for life
- Pension drawdown, where you leave your pension invested and take income as you need it
- Taking lump sums
Check your annuity options and compare across the whole market with HUB Financial Solutions. Find the best option for you.
How much do I need to save to reach my target retirement income?
The PLSA's retirement living standards are designed to give you a better idea of how much you might need to spend each year in retirement. The next step is working out how much you'll need to save in your pension to generate the gross (before tax) annual income you want.
We've calculated the total amount you'll need to save to reach the PLSA's moderate retirement living standard, depending on whether you access your money via drawdown or an annuity.
Figures assume you get the full level of new state pension (£11,973 a year).
| Moderate retirement living standard | Total amount needed if using drawdown | Total amount needed if buying an annuity | |
| One-person household | £31,700 a year | £375,600 | £312,600 |
| Two-person household | £43,900 a year | £381,800 | £317,700 |
Here's how much you'd need to reach the comfortable living standard:
| Comfortable retirement living standard | Total amount needed if using drawdown | Total amount needed if buying an annuity | |
| One-person household | £43,900 a year | £609,270 | £505,000 |
| Two-person household | £60,600 a year | £697,500 | £578,000 |
Notes: Annuity figures are for a healthy 65-year-old purchasing a single-life level annuity (where payments are fixed each year), based on rates in June 2025. Drawdown figures are based on a saver withdrawing all their money over 20 years from age 65 and assume annual investment growth of 3%, inflation of 1% and charges of 0.75%.
Retirees living alone face a tougher challenge, given their higher relative expenditure together with lower state pension and tax-free allowance compared with a couple. This means they have to build up a bigger private pension pot, relative to two-person households.
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Find out moreAverage pensioner income in the UK
According to the Institute for Fiscal Studies (IFS), average pensioner incomes grew by 22% between 2002 and 2011, while average working-age incomes fell by 3%. Since then, this gap has closed.
In fact, data from the Department for Work and Pensions (DWP) pensioners' incomes series shows that the average weekly income for retirees (in real terms) has dropped in recent years.
Average pensioner incomes were £407 per week in 2023-24, down from £410 the previous year and the lowest level since 2019-20. Couples had an average weekly income of £595, while the figure for single pensioners was £282.
Meanwhile, income for non-retired households has continued to grow.
When should I start saving for retirement?
The earlier you can start saving for retirement, the better.
When you pay money into a pension you benefit from tax relief. If you're a basic-rate taxpayer, this means that a £100 contribution is boosted to £125. Thanks to tax relief and investment growth, any contributions you make today are likely to be worth much more by the time you retire.
Under auto-enrolment rules, the minimum total contribution for a workplace pension scheme is 8% of your ‘qualifying earnings’ – made up of 5% from you (including tax relief) and 3% from your employer.
You can opt to pay in more than this – a great idea if you can afford to do so. Some employers will even match your contributions.
- To get a better idea of how much your pension pot might be worth at retirement, and how much income this could give you, use Which?’s free pension calculator.