What is a good pension pot? 

A ‘good’ pension pot is one that generates enough income for you to cover your expenses during retirement. As life expectancy increases, so does the necessity for a larger pension pot.

To work this out, you need to think about annual expenses, not just a total lump sum. We’ll use a defined contribution pension pot as an example, as defined benefit schemes offer a largely guaranteed income.

• The 4% rule: The 4% rule: A helpful, if not failsafe, rule of thumb for calculating sustainable income. Withdrawing 4% of your total pot in year one, then adjusting for inflation each year, has historically given a strong chance of your money lasting 30 years — though some advisers recommend a more conservative rate of 3–3.5%.
• An example calculation: To get an income of £20,000 from your private savings (on top of the State Pension) you’d need a pot of roughly £500,000. 

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How much should I have in my pension? 

While everyone’s journey to retirement is different, there are some rough age-based benchmarks to help check if you’re on the right track.

• At 30 you should aim to have saved your current annual salary, once. For example, if you earn £30,000, you should have £30,000 in pension savings.
• At 40 you should aim to have saved three times your annual salary. For example, if you earn £30,000, you should have £90,000 in pension savings.
• At 50 you should aim to have saved six times your annual salary. For example, if you earn £30,000, you should have £180,000 in pension savings.

These are great scenarios but if you are behind where you need to be, don’t panic — saving for retirement is a marathon, not a sprint. You can catch up by increasing your contributions later in your career.

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Retirement Living Standards (PLSA) 

The Pensions and Lifetime Savings Association (PLSA) publishes the Retirement Living Standards.

These act as a practical guide to help you understand how much income you might need to achieve different standards of living in retirement (calculated after income tax).

These figures are updated for the 2025/26 Tax Year and assume you will be mortgage-free by the time you retire.

The Minimum Lifestyle

• Cost: £13,900 (one-person) | £22,500 (two-person)
• What it covers: All your basic, essential needs with a little left over for fun. It includes a UK holiday (self-catering or half-board), one meal out per month, and affordable weekly leisure activities, but no car.
• Amount needed: For a two-person household, two full State Pensions combined usually cover this standard. A one-person household will generally need a small private pension pot to top up the State Pension and bridge the gap.

The Moderate Lifestyle

• Cost: £32,700 (one-person) | £45,400 (two-person)
• What it covers: Increased financial security and more flexibility. You can run a small car (replaced every 7 years), take an annual 2-week overseas holiday alongside a UK long weekend break, and enjoy eating out or ordering takeaways a few times a month.
• Amount needed: A one-person household would typically need the full State Pension supplemented by a private pension pot of roughly £335,000 to £505,000.

The Comfortable Lifestyle

• Cost: £45,400 (one-person) | £62,700 (two-person)
• What it covers: More financial freedom, spontaneity, and some luxuries. You can replace a small car every 5 years, enjoy regular theatre trips or day outings, take a 2-week foreign holiday (up to 4-star), and enjoy up to three UK long weekend breaks every year.
• Amount needed: A one-person household would typically need the full State Pension supplemented by a private pension pot of roughly £560,000 to £845,000.

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What is my retirement age? 

There are two key ages to know when it comes to accessing your pension pots. You can of course choose to stop working earlier, but only if you have enough savings to fund your lifestyle without drawing on these pots.

Outside this scenario, these are:

• State Pension Age: This is when the government starts paying you. Currently, it is 66, rising to 67 between 2026 and 2028. Read our full guide on the State Pension.
• Normal Minimum Pension Age (NMPA): This is the earliest you can usually access your private or workplace pension. Currently, it is 55, but it will rise to 57 on 6 April 2028.‍

Note: If you were a member of a pension scheme before 3 November 2021, you may have a 'protected pension age' — meaning you could still access that pension from age 55, even after the 2028 change. This applies at scheme level, so it's worth checking each pension you hold individually, as the protection may not apply to all of them. 

Read our full guide on retirement ages.

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Pension contributions

Once you’ve worked out how much you need to retire, the next step is working out how to get there.

Hitting a £500,000 target might sound impossible if you just look at your salary, but you don’t have to do it alone.

Between tax relief and employer contributions, the amount landing in your pot can be significantly more than what you actually pay from your salary or savings.

In our next guide, we break down exactly how these contributions work and the ‘golden rule’ for how much you should be contributing based on your age.

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