What is a good retirement income?

Start with the benchmarks

The Pensions and Lifetime Savings Association publishes Retirement Living Standards, updated annually, which set out what different lifestyles actually cost. They are the most useful reference point available because they are built from real spending research rather than a rule of thumb.

They describe three levels. Minimum covers all your needs with a little left over for fun. Moderate gives more financial security and more flexibility. Comfortable allows more financial freedom and some luxuries. Each is published for a single person and for a couple.

Standard	One person	Two people
Minimum	£13,900	£22,500
Moderate	£32,700	£45,400
Comfortable	£45,400	£62,700

Retirement Living Standards, published by Pensions UK, formerly the Pensions and Lifetime Savings Association, with Loughborough University. Figures for households outside London, current at September 2026 and updated annually.

Two things people miss when they look at these. They assume no housing costs, so if you will still have a mortgage or pay rent, add that on top. And they are household figures, so a couple needs less than two singles because the costs of running a home are shared.

Where the state pension fits

For most people the new State Pension is the foundation everything else sits on, and it covers a meaningful share of the minimum standard on its own. Two people each with a full entitlement start from a considerably better position than one.

The full new State Pension is £241.30 a week in 2026/27, which is £12,547.60 a year. That sits just under the £12,570 personal allowance, which is frozen, so the two are close to converging. State Pension age is currently 66, rising to 67 for anyone born after March 1961.

Check your own forecast on GOV.UK: you need 35 qualifying years for the full amount, and gaps from time out of work, low earnings or self-employment are common. You can get a forecast from gov.uk, and in some cases gaps can be filled by voluntary contributions, which is occasionally very good value.

Working out what pot you need

Once you know your target income and what the state pension covers, the gap is what your own savings have to produce. Turning that gap into a pot size is where it gets harder, because it depends on how long you live and what your investments do.

A commonly cited starting point is that drawing around 4% of a pot each year has historically had a reasonable chance of lasting around thirty years. Treat that as a rough starting point only. It came from different markets and different conditions, it assumes you increase withdrawals with inflation, and it says nothing about your particular circumstances.

As a very rough illustration, a gap of £10,000 a year would suggest a pot somewhere around £250,000 on that basis. Whether that is right for you depends on your other income, your health, whether you have a partner, and how much variability you can tolerate.

The things that change the answer most

• When you stop. Retiring at 60 rather than 67 means seven more years of drawing and seven fewer of saving. It is the single biggest lever most people have.
• Whether you have a partner. Shared costs and two state pensions change the arithmetic substantially.
• Housing. Owning outright versus still paying is often a larger factor than the size of the pension.
• Whether spending stays flat. It usually does not. Many people spend more in the first decade of retirement, less in the middle, and more again later if care is needed.
• Any defined benefit pension. A guaranteed, inflation-linked income is worth far more than an equivalent-looking pot and changes how much risk you need to take elsewhere.

Why an average is not a target

People often ask what the average retirement income is, and it is a reasonable question, but the answer is not very useful. Averages are dragged around by a small number of very large pensions and tell you nothing about what your life costs. The benchmarks above are more use precisely because they start from spending rather than from what other people happen to have.

If you want to know whether your own position gets you to the standard you want, that is a matter of modelling your own figures, and that is most of what we do in our retirement and pensions work.

This page is general information about the rules and does not constitute advice.

Last reviewed: 17 September 2026. Next review: Annually, when the PLSA standards update.