How much money do I need for my retirement?

You can use our Pension calculator to see how much retirement income you’re likely to:

• need – based on your current salary

• get – based on your current pension values and the age you’d like to retire.

You can also see how your estimated income might rise or fall if you change:

• how much you pay in

• your planned retirement age.  

Alternatively, the steps in this guide will help you work out how much money you might need for a comfortable retirement.

How much money you’ll need for your retirement largely depends on:

• when you plan to stop getting other income (like wages from working), and

• how long you expect to live for.

Most of us won’t know how long this will be, but you can use the life expectancy calculatorOpens in a new window on the Office for National Statistics website for a rough idea.   

Many people also underestimate how long their retirement will be, so it’s a good idea to plan for at least a few years longer than you expect.

For example, if you plan to stop working at age 68 and hope to live to age 90, your retirement would last an estimated 22 years. In this case, it’s worth planning for your money to last for at least 25 years. 

You can choose to retire at any age, but you might have to wait to take your pension. This might mean you cannot afford to retire until you reach a certain age.

For private pensions you’ve saved into, the earliest you can usually take your money is age 55 (57 from April 2028), unless you need to retire early due to poor health or your scheme lists an earlier protected age. 

But most pensions are designed to pay out around ten years later, so you’ll often get less if you take it earlier than your scheme’s normal pension age. 

For the State Pension, it only starts when you reach your State Pension ageOpens in a new window and claim it.  

For more information, see our guide When can I take money from my pension?

To help work out how much retirement income you might need, it’s a good idea to think about the costs you’re likely to still have. 

For example:

• regular bills – like gas, electricity, food, insurance, rent or mortgage

• travel costs – like fuel, train or bus tickets

• other living costs – like clothing, eating out and care costs

• one-off costs – like emergency repairs, home improvements and holidays.

If you’re confident you will not have a mortgage or rent to pay in retirement, the Retirement Living Standards lists how much income you might need each yearOpens in a new window for different types of lifestyles. 

For a more detailed estimate and to list your future expenses, you can use our:

• Budget planner

• Budgeting in retirement worksheetOpens in a new window  (PDF, 74KB)

Next, think about all the sources of income you plan to have in retirement and when they might start or stop paying.

For example, you might have income from:

• a private pension

• the State Pension

• working 

• benefits

• savings and investments, including rental income.

You can usually log in to your pension provider’s online account or check recent statements to find out: 

• how much your pension is currently worth  

• how much your pension is estimated to pay at your normal pension age. 

For more help, see our guides: 

• How to find old or lost pensions
• How to check your estimated pension and retirement income

If you have a defined contribution pension, your pension can rise and fall in value until you take the money. 

Your estimate is also usually based on you converting all your money into guaranteed income at your scheme’s normal pension age. This is called buying an annuity and will be based on the current market rates.

This means you might get a different amount if you choose a different method, such as:

• taking up to 25% as a tax-free lump sum and leaving the rest until you need it – called pension drawdown

• taking one or more lump sums, with up to 25% of each amount paid tax-free.  

If you have a defined benefit pension, you’ll get guaranteed income based on your salary, how long you worked for your employer and any annual increases your provider might apply. 

You can often take up a tax-free lump sum, but this might reduce the amount of income you get. 

You can check your State Pension forecastOpens in a new window on GOV.UK to see:

• how much you’re on track to get
• when you can claim it.

If you’re not likely to get the full amount, there are ways you can boost it. 

The State Pension increases in April each year, so the actual amount you’ll get in the future will be higher than your forecast shows. For more information, see What is the State Pension triple lock?

Look at your future costs and see if your estimated retirement income is enough to cover them – or if you’re likely to have a shortfall. 

Even if your income covers your costs, you might need to change the way you usually budget. This is because different types of pensions often pay out at different times.

For example:

• the State Pension is a weekly amount paid every four weeks

• defined benefit pensions often pay out once a month 

• defined contribution pensions can be taken as:
  • regular monthly income
  • income as and when you need it. 

There are many ways you can increase your retirement income, including:

• paying more in – your employer might also match your contributions

• checking you’re getting all the tax relief you’re eligible for

• making sure you’re on track for the maximum State Pension 

• delaying your retirement date.

For more information, see our guide Ways to boost your pension.

You can also use our Benefits calculator to check if you’re entitled to any extra payments or grants. 

If you have a defined contribution pension, we offer free Pension Wise appointments to help you understand the options for taking your money.

You can have an appointment if you have a UK-based defined contribution pension and are: 

• 50 or over  

• under 50 and: 
  • retiring early due to poor health or 
  • have inherited a pension.

You can have an online appointment at any time or book a date and time with one of our pension specialists.

If you have any questions about your pension, our pension specialists can help – it doesn’t matter how old you are.