What’s a comfortable retirement income in the UK?

Do you know how much you need in order to have a comfortable retirement income in later life? We break it down for you.

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Have you really got to grips with your retirement savings? Do you know how much money you really need to achieve a comfortable retirement income?

You may be happily saving away into your pension pot, without any real idea of where you are trying to get to. In this article, we are going to break down what is considered a comfortable retirement income and how you can achieve it.

What’s a comfortable retirement income?

To begin with, we need to look at what is considered a ‘comfortable’ standard of living in retirement.

The Pension and Lifetime Savings Association (PLSA) has defined three levels of retirement living: minimum, moderate and comfortable.

Under its definition, a comfortable retirement would include eating out, regular beauty treatments, subscriptions to streaming services and around two foreign holidays a year. Basically, a standard of living where you could be spontaneous with your money and afford some luxuries.

To achieve this you would need a retirement income of £33,000 a year if you were single. If you are a couple it would be £47,500 a year.

How big does my pension pot need to be?

It’s all very well and good knowing what a comfortable retirement income is, but what you really need to understand is how much you need in your pension pot to achieve it.

When thinking about your retirement savings, you need to think about it in blocks. Firstly, consider how much state pension you are likely to get.

If you qualify for the full State Pension, then you will receive £9,339 a year. When you get this depends on what the State Pension age is at the time. Currently, it is 66 for both men and women. But this is expected to rise to 67 by 2028.

As you can see, the State Pension doesn’t get you anywhere near a comfortable retirement income of £33,000 a year. So the likelihood is that you will need to draw from other pensions to make up for the shortfall.

The PLSA says that in order to achieve this, you will need to build up a pension pot worth at least £599,667 in order to achieve a comfortable retirement.

How do I go about saving into a pension?

There are typically two ways to go about saving up your pension pot. Let’s take a look:

Workplace pension

The arrival of auto-enrolment means that if you are an employee, you are most likely saving into a workplace pension.

This works by a percentage of your salary being put into a pension scheme automatically every payday. Typically, your employer will also add money into the scheme for you. You will also most likely qualify for tax relief from the government.

So under a workplace pension, you will be saving something, your employer will be topping it up and you will receive a government contribution in the form of tax relief.


If you are self-employed or want to have an additional pension scheme to your workplace pension, then you could set up a self-invested personal pension (SIPP).

This can be done through a number of providers. And with the emergence of digital wealth managers like Wealthsimple and Nutmeg, you can easily set one up online and get saving.

Obviously, the major difference with a SIPP is that you won’t have any employer contributions. You will also need to set up your own direct debit if you want to make sure you are making regular payments to your pension pot.

But don’t worry, you will still be able to claim tax relief on your savings.