Retirement: How much might you need?

First and foremost, we need to factor in your current financial position. How much do you have saved in your pensions? Are you on a high income, and do you expect your income to remain high in retirement?

Then there are the lifestyle elements. Do you plan to travel a lot in retirement? Could any health issues raise care costs down the line? Will you need to support your children or grandchildren with house deposits or university costs?

All these questions and more need to be answered before we can determine with any confidence how much you might need in retirement. But, that doesn’t mean there aren’t certain benchmarks we can assess ourselves against. 

Pensions UK, the membership body that represents the UK pensions industry, developed the Retirement Living Standards. These standards were created following detailed research on what a realistic retirement lifestyle looks like for the public at different levels of spending.

The researchers took into account different budgets; factoring in food, transport, holidays, and various other lifestyle costs. The results are broken down into three different levels – what’s needed for a minimum, moderate, or comfortable retirement living standards. 

This is the minimum income needed after tax per year to cover all the essentials, with some left over for fun. Currently, for one person, the minimum is £13,900, or £22,500 for two. It rises to £14,600 and £24,100 for those based in London. 

This level of income provides more financial security and flexibility in retirement. For one person, it’s £32,700, and for two it’s £45,400. In London, it rises to £34,000 and £47,000 respectively. 

At this level, there is even more financial freedom, with money left over for some luxuries. The income required per year for this standard is £45,400 for one person, or £62,700 for two. Once again, it rises to £47,200 and £64,800 in London. 

While Pensions UK expects around 82% of the working population to reach the minimum standard of living in retirement, only 9% are expected to reach the comfortable level. To do so, a person will need an estimated £560k–£845k saved in private pots, according to modelling from the organisation released in June 2026.

While these figures can be intimidating, there are steps we can take to give ourselves the best chance of enjoying a comfortable retirement. To start with, our advisers can use cash flow modelling to assess where you stand, and if your finances are on track. 

Cash flow modelling can help reveal how your current financial situation measures up against your life goals. In simple terms, a cash flow model is a year-by-year forecast of your money coming in, your financial outgoings, and the resulting balances.

It can help you manage the wealth you've built up, understand how much you may need to save, and identify the level of investment returns required to meet your goals. Crucially, it can also help assess how long your money might last during retirement, and determine if you have enough saved to cover unexpected costs. 

Of course, even these standards from Pensions UK can be subjective. One retiree’s minimum standard of living could be completely different from another. 

Also, while it may be the case that some people would need around £845,000 in savings for a comfortable retirement, others may only need a fraction of that to live comfortably. 

Whether retirement is just around the corner or still some way off, our advisers can help you understand how your plans are shaping up. If changes are needed to help you achieve the retirement you want, they'll work with you to build a plan that reflects your goals, priorities and personal circumstances.

You can book a free, no obligation call with one of our team today. There are no hidden fees or charges, and you’ll only pay if you choose to go ahead with the recommendations in your personalised financial plan.

This article is for information purposes only. It is not intended as investment advice.

Fees, charges and eligibility criteria apply.

The retirement benefits you receive from your pension plan depend on a number of factors including the value of your plan when you decide to take your benefits which isn’t guaranteed and can go down as well as up. The benefits of your plan could fall below the amount(s) paid in.

Any views expressed are our in-house views as at the time of publishing.

This article refers to third party sources which we believe to be true and accurate.