In 30 seconds
- Moderate retirement, one person: £32,700 a year to spend, after tax. With a full State Pension, that needs about £25,200 a year of taxable private pension income.
- At a 4% yearly withdrawal, that is a pot of about £630,000. At a more cautious 3.5%, about £720,000.
- A couple with two full State Pensions can reach the minimum standard with no private pension at all.
- These budgets assume you own your home outright. Renting changes everything.
Key figures
Retirement Living Standards. Figures are spending after tax and assume no rent or mortgage.
Start with what you will spend
The most useful benchmark in the UK is the Retirement Living Standards. They describe three levels of retirement, from covering the basics to a comfortable life with regular holidays, and put a yearly price on each.
| Standard | What it roughly covers | One person | Two people |
|---|---|---|---|
| Minimum | Your needs, a little left for fun, a week's UK holiday | £13,900 | £22,500 |
| Moderate | More security and choice, a holiday abroad each year | £32,700 | £45,400 |
| Comfortable | More financial freedom and some luxuries | £45,400 | £62,700 |
Two things to keep in mind. These are amounts to spend, after tax, so you need a bigger income before tax. And they assume no rent or mortgage. If you will still be paying for housing, add that on top.
Then take away the State Pension
The full new State Pension is £12,548 a year in 2026/27. It covers most of the minimum standard on its own, and it is taxable, which matters below.
Whatever is left over has to come from a private or workplace pension, savings or other income. Because that income is taxed too, we worked out the income you need before tax to end up with each spending level, using 2026/27 tax rates for England, Wales and Northern Ireland.
The pension pot behind each budget: one person
| Minimum | Moderate | Comfortable | |
|---|---|---|---|
| Spending a year, after tax | £13,900 | £32,700 | £45,400 |
| Income needed before tax | £14,232 | £37,732 | £54,720 |
| Less full State Pension | £12,548 | £12,548 | £12,548 |
| Private pension income needed | £1,684 | £25,184 | £42,172 |
| Pot at 4% withdrawal | £42,000 | £630,000 | £1,054,000 |
| Pot at 3.5% withdrawal | £48,000 | £720,000 | £1,205,000 |
The pension pot behind each budget: a couple
For couples we assumed each partner gets the full State Pension and the private income is split equally, so both use their Personal Allowance.
| Minimum | Moderate | Comfortable | |
|---|---|---|---|
| Spending a year, after tax | £22,500 | £45,400 | £62,700 |
| Two full State Pensions | £25,095 | £25,095 | £25,095 |
| Private pension income needed, combined | £0 | £25,370 | £46,995 |
| Combined pot at 4% withdrawal | £0 | £634,000 | £1,175,000 |
| Combined pot at 3.5% withdrawal | £0 | £725,000 | £1,343,000 |
The striking result is the first column. A couple who both get the full State Pension, and own their home, can reach the minimum standard without any private pension at all. That is why filling gaps in your National Insurance record can be so valuable.
It also shows how much splitting income helps. A comfortable single retirement needs a pot of about £1.05 million at 4%. A comfortable retirement for two, spending 38% more, needs only about 11% more in combined pots.
What "4% withdrawal" means, and why we show 3.5% too
A withdrawal rate is the share of your pot you take out in the first year, then increase with inflation. At 4%, a £630,000 pot pays about £25,200 in year one.
The 4% figure comes from US research by the planner William Bengen into how long portfolios lasted over 30-year retirements. It is a rule of thumb, not a guarantee, and UK experts suggest a little less. Rathbones puts a UK safe starting rate at about 3.7–3.9% a year before fees. Morningstar suggests UK retirees paying around 1% a year in fees start nearer 2.5–3%. That is why we show 3.5% alongside 4%.
The other option is an annuity: you swap your pot for a guaranteed income for life. Annuity rates change often, so compare quotes when you get close to retiring.
What these figures leave out
- The tax-free lump sum. Up to 25% of a pension can usually be taken tax-free, up to £268,275. That makes the same pot go a bit further than our figures show.
- Retiring before State Pension age. If you stop work at 60, you need to cover the full budget, not just the gap, until your State Pension starts. For most people today that means age 67.
- Defined benefit pensions. If you have a final salary pension, take its yearly income off the private pension income needed before working out a pot size.
- Care costs later in life, which can be large and are not in these budgets.
- Scotland. Scottish income tax bands are different, so the income needed before tax will be slightly different.
Where to go from here
- Check your State Pension forecast on GOV.UK. Your real figure may be higher or lower than the full rate.
- Add up your current pension pots. The free Pension Tracing Service can help find old ones.
- Pick the standard you are aiming for, and compare your total with the tables above, or use the retirement income calculator.
- If you are short, the cheapest money to add is often your own contribution with tax relief on top, plus any employer matching.
See whether your pensions will reach your targetFree, no sign-up, nothing you type leaves your browser.
Open the calculatorCommon questions
Is 4% a safe withdrawal rate in the UK?
It is a rule of thumb from US research, not a guarantee. UK analysis by Rathbones suggests about 3.7–3.9% before fees, and Morningstar suggests 2.5–3% for UK retirees paying around 1% in fees, if you want your money to last 30 years.
Do these figures include housing costs?
No. The Retirement Living Standards assume you own your home outright. If you will still pay rent or a mortgage, add those costs on top.
Should I count the tax-free lump sum?
Yes, it helps. Up to 25% of a pension can usually be taken tax-free, so the same pot can produce slightly more spendable income than our figures show. We left it out to keep the estimate cautious.
Sources
This guide is general information, not personal financial advice. Rules can change and your situation may differ. For free, impartial help, contact MoneyHelper, or speak to a regulated financial adviser.
