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How much do i need to retire

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    Updated 23 August 2023.

    The latest research (published in 2023) suggests that the minimum amount you’ll need every year in retirement is £16,996 for a single person or £26,113 for a retired couple.

    Of course, no one wants to survive on the bare minimum; Afterall, your retirement is your time to really enjoy the things in life that matter to you. It’s important to approach your retirement planning with a more personal approach: relying on estimates will never work in your favour.

    That’s why we’ve put together this handy guide to help you work out how much you’ll need to retire for your own unique circumstances.

    How much do I need to retire?

    The amount of money you'll need to enjoy a comfortable retirement is subjective, however, the latest estimates from the Pensions and Lifetime Savings Association range between £12,800 to £37,300 for a single person and between £19,900 and £54,500 for a couple.

    Estimates can be useful in early retirement planning but remember, they are based on averages and they won’t suit everyone.

    Essentially, you need enough money to last you an undisclosed amount of time.  You need enough funds to cover your basics, but also to allow for comforts and luxuries such as gifts for loved ones, holidays, a new car, having a dog (or three!), hiring a cleaner, a golf membership, yoga classes… The list could go on and on.

    It is better to base your retirement plans on your existing or expected standard of living.

    Don’t forget that there will always be those unplanned expenses. Household repairs and unexpected healthcare bills need to be paid for somehow.



    Minimum Income Standards for retirement 

    The Pensions and Lifetime Savings Association (PSLA) publish updated minimum income standards for retirement every couple of years.

    The recommended minimum income standards are based on the minimum amount an individual (or couple) would need to live and be part of society. Think of it as the retirement equivalent of the basic living wage.

    Retirees Minimum Moderate Comfortable

    The current full state pension for 2023-24 is £10,600. As a couple, if you both qualify for the full state pension, you'll have enough income in retirement to cover your basic needs, but as a single person, the state pension alone would leave you short.

    Target Replacement Rate for retirement income

    Target Replacement Rate was created by the Pensions commission as a way of estimating how much individuals will need in retirement to maintain their pre-retirement living standard.

    For example, take someone who - pre-retirement - was earning £33,280 (the UK average income 2023). Target replacement rate states that they would need 67% of their pre-retirement income to continue living in the same way.

    In comparison, anyone earning over £62,800 would need 50% of their pre-retirement income.


    Table: Pension Commission Target replacement rates

    Overall 2004 income band Income band in 2021 earnings terms Target Replacement Rate
    Up to £9,500Up to £15,00080%
    £9,500 - £17,500£15,000 - £27,50070%
    £17,500 - £25,000£27,500 - £39,30067%
    £25,000 - £40,000£39,300 - £62,80060%
    Over £40,000Over £62,80050%

    Target replacement rate can be a useful way of calculating how much you'll need to retire, but it isn't perfect; especially if you want to enhance your standard of living in retirement, are renting or plan to continue supporting dependant children or family.

    In addition, the post-covid ‘working from home’ era means that many people have already made major savings on their commuter costs, and the original Target Replacement rate calculation assumptions can be flawed.

    Post-covid, retirees can expect to pay far more for small luxuries such as UK travel, theatre tickets and eating out. In fact, research has found that retired couples will need an average of £2,200 per year extra to enjoy the small luxuries that we all look forward to in retirement.


    Calculating a comfortable retirement amount

    The latest retirement living standard figures from PSLA suggest that a couple now needs roughly £54,500 a year to enjoy a comfortable retirement, while a single retiree should aim for an annual budget of £37,300.

    The issue is, this is entirely subjective. It doesn’t take into account a person’s individual circumstances, their hope for those golden years or what standard of living they are used to.

    What is seen as a ‘goodretirement income depends on an individual’s expectations for retirement, and this is influenced by their life experiences and any changes that they hope to live out during their golden years. These expectations could include:

    • Avoiding deprivation
    • Maintaining dignity
    • Comfort
    • Being a part of a community
    • Happiness and wellbeing

    How much do I need to retire calculator 

    The best way to work out how much you need to retire, is to base your calculations on your existing lifestyle and retirement lifestyle expectations.

    Using the most up-to-date industry figures and average retirement spending for couples - based on the above expectations - and our own research, we have created a free retirement planning calculator. This will help you:


    • ​​understand the rough numbers around your retirement based on your expenditure
    • use our simple calculations to help you budget accordingly
    • gain the confidence to make the right decisions for your future
    • have the opportunity to receive further, in-depth and tailored advice from our team of investment specialists

    Try out our free calculator for yourself here.

    How much does a married couple need to retire UK


    Estimates for how much a married couple needs to retire vary between £19,900 and £54,500 (more if you're living in London).

    The lower range of the estimate covers your basic needs with some small provisions for fun, like an annual week-long holiday in the UK and a weekend away, but you won't be able to afford a car, takeaways or eating out.

    Couples generally need less per person than a single person because many of the costs such as bills, food and travel can be split. Of course, you may need to budget extra to accommodate both of your hobbies etc.

    Couples retirement example:

    To enjoy the PSLA's comfortable living standard for a couple of £54,500.

    • You'll need £33,300 a year on top of your existing full State pension (assuming you both qualify for the full state pension of £10,600 each)
    • As a rough estimate, you'll need a combined pension pot of around £830,000 to reach your retirement target.
    chart showing UK retirement income standards for a couple from Which, PLSA, and Joseph rowntree foundation

    Budgeting for retirement

    Retirement planning should be tailored to your lifestyle as a couple, it's best to work out your own budget for retirement. Especially if you are high earners used to an annual income over £100,000.

    Here are some suggestions for what to include in your budget.

    • Basic living costs - rent, bills, food
    • Lifestyle luxuries - clothes, toiletries, personal care
    • Everyday lifestyle - entertainment, gym memberships, pet ownership, socialising
    • Travel - weekend breaks and holidays plus car costs, taxis & trains
    • Home - garden, DIY & decoration
    • Celebrations - birthdays, gifts, Christmas & other celebration costs
    • Emergency Fund

    Our couple's retirement calculator does a lot of the heavy lifting for you, we've already added in the basic costs of popular retirement activities and other estimates for you. Click below to work out how much you and your partner will need:

    How much does a single person need to retire UK

    The latest research suggests that a single person will need between £12,800 to £37,300 in order to enjoy a comfortable retirement.

    This is a considerable range, the reason being that it is near enough impossible to give a black and white answer to this question. It is crucial that you consider your personal circumstances, lifestyle choices and anything that you’ve been ‘putting off’ pre-retirement (do house renovations and far-flung travels ring a bell?).

    Bear in mind, if you earn over £62,800, you'll need at least 50% of your pre-retirement income to maintain your existing standard of living.


    If you want to establish how much you need to save for retirement, here are a couple of plces to start:

    As a rule of thumb, you'll need about £100,000 invested in your pension pot for every £3,000-£4,000 of income you plan to take in retirement.


    Single person retirement example:

    To enjoy the PSLA's comfortable living standard for a single person of £37,300

    • You'll need £26,700 a year on top of the existing full State pension of £10,600
    • As a rough estimate, you'll need a pension pot of around £667,500 to provide this sort of income in retirement.


    You can use our FREE singles retirement calculator to gain an initial idea of how large you need your pension pot to be. Click the button link below.


    chart showing UK retirement income standards for a couple from Which, PLSA, and Joseph rowntree foundation

    Remember: this should be viewed as a starting point. If you want 100% personalised and professional advice, we always recommend speaking to an independent advisor.

    How much do I need to retire early

    The current state pension age is 66 for both men and women, this is rising to 67 and eventually 68. This is the age at which you can claim your state pension if you're eligible.

    If you want to retire early you'll need to build up savings to fund your early retirement. Currently, you can access your private pension at 55 (moving to 57) and use this to fund your retirement until you reach state pension age.

    The amount you will need to retire early depends on a few different things

    • The age you retire
    • How much retirement income you require per year
    • whether you have any other sources of income i.e. savings, rental income, dividends from investment.
    The earlier you retire, the greater the amount of money you'll need to retire early. The higher the income you require in retirement, the greater the amount of money you'll need to save.
    Conversely,  the more money you have from other sources of income, the less you'll need in your retirement pot.

    How much do I need to retire at 55 UK

    The current UK minimum recommended income in retirement is £16,996 for a single retiree and £26,113 a year for a couple, so if you plan to retire at 55 you’ll need at least £186,956 (as a single person reaching state pension age at 66) or £287,243 (as a couple reaching state pension age at 66) just to last until your state pension kicks in.

    After that, you'll need enough money in your private pension pot to top up your state pension income to your preferred annual income.

    We asked Simon Garber, our retirement planning specialist IFA – how much you’d need in your pension pot if you’re planning on investing your money and using pension drawdown to retire at 55, he said

    “As a rule of thumb, for every £3-4K you plan to take in annual income, you’ll need about £100,000 in your pension pot. So if you opt to take £10K per year, you’ll want between £300-£400K in your pension pot.”

    While the Pension Freedom changes may have put early retirement within reach, it’s worth noting that the 55 threshold will move to 57 on 6 April 2028.


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    How much do I need to retire at 60 in UK

    Retiring at 60 puts you closer to the age at which you'll be eligible for your state pension but there are still quite a few years where you'll need to fund your income privately. If you're not working you'll need savings, other sources of income or a personal pension pot that you can draw from.

    Even at the minimum recommended income level of £16,996 for a single retiree and £26,113 a year for a couple, you'll still need to find between £102,000 and £157,000 to retire at 60, assuming your state pension kicks in at 66.

    These are large sums of money, and we're only talking about the minimum recommended income for retirement… This really is the bare minimum. That means no dog, no car, no trips abroad. It’s retirement in its most basic form.

    However, if you’re hoping to enjoy a comfortable retirement the latest figures from PSLA suggest that a couple now needs roughly £54,500 a year to enjoy a comfortable retirement, while a single retiree should aim for an annual budget of £37,300 (or if you’re using Target Replacement Rate as a measure, you’ll need between 50%- 80% of your pre-retirement annual income every year).

    Again, you'll also need to top up your income after you receive your state pension because it's unlikely it will be enough for you to enjoy a comfortable living standard in retirement

    N.B. The current state pension age is changing, for some of us, we won’t receive our state pension until we’re at least 68.



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    Saving for retirement 

    A private pension is without a doubt the most tax-efficient vehicle if you’re saving for retirement. The benefits are enormous and if you want to ensure your golden years free from financial stress, properly planning for your retirement with a pension is the ultimate way to go.

    First of all, pensions enable you to receive free money from the government in the form of pension tax relief. So, depending on your rate of tax, the government will top up whatever you put into your pension.

    In addition, you can access even more money through employer pension contributions. This is only applicable if you’re an employee, unsurprisingly. The good news is that with auto-enrolment you’ll automatically be put into a workplace pension scheme, and so you’ll start reaping these benefits straight away.


    Self-employed & directors saving for retirement

    If you’re self-employed or a business director, your business can actually pay your pension contributions on your behalf, meaning you won’t need to pay any tax on them. This can work out more financially beneficial than taking the money out as a salary; it’s a great way to give yourself an automatic pay rise.

    Whatever your professional situation, there is no capital gains tax on the money made within a pension and it isn’t liable for inheritance tax. All of this together makes it the most tax-efficient wrapper possible for your hard-earned investments.

    You can access your private pension from the age of 55 (this is soon moving to 57) and the first 25% that you take out is tax-free - clearly, the benefits are major.

    However, if you still aren’t sure whether a pension is the right investment for you, you can get in touch with an independent financial advisor.

    Pension saving at age 20, 30, 40 and 50 - investing for retirement

    Ways to reach your Retirement target

    There are a number of ways to reach your Retirement target:

    • State Pension
    • Personal or Employee Pension
    • Money from Downsizing
    • Investments & savings
    • Income from Earnings
    resources vs expenditure in retirement

    With the new pension freedoms, most people with an employee pension (defined contribution plan) will opt for a flexi-access (income-drawdown) or a guaranteed lifelong regular income (annuity) or a combination of both when it comes to taking money out of their pension.

    Most people now know that they can access a tax-free lump sum from their pension from the age of 55, but what they don’t know is that this doesn’t need to be taken all in one go, you can spread this across a number of withdrawals. You could, for instance, use this money to subsidise an early retirement before you receive the state pension.

    How to start planning for retirement.

    Contrary to belief, retirement doesn’t have to be hard; in fact, with the right planning and approach, it can be an exciting experience. However, it is often oversimplified.

    Retirement planning is a complex process with many moving parts like state pensions, pension rules, and it’s likely that you will need to adjust your plans over time to accommodate life events and unforeseen circumstances.

    Our Financial Advisors can help you build a robust retirement plan that will help you manage your money through your retirement and keep you on track with your retirement goals both before and after you retire.

    What does our tailor-made retirement plan include?

    • Assessing your pension/s – making sure you have the right one for you
    • Looking at all of your assets and investments
    • Creating a plan to clear any debt before you retire
    • Creating Income and spending projections
    • Setting retirement goals
    • Tax-efficient planning for your money
    • Investing to maximise your pension
    • Annual reviews to keep you on track with your goals

    Once you’ve got your Retirement Plan in place, you can put your feet up and rest easy!

    For more information (and step by step advice) you can read our full guide here.

    Of course, there’s no substitute for tailored retirement planning from a qualified financial advisor. To kickstart your financial future, get in touch to book a free consultation with a member of our friendly team.

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