How much do you need to retire?
The short answer
Start with the income you want, not the pot. A target income is something you can picture and check against your own spending. A capital figure is an abstraction that falls out of it.
Subtract the State Pension, then divide. A full new State Pension is £12,547.60 a year from April 2026. Whatever is left is what your own savings have to produce, and dividing that by a withdrawal rate gives a rough capital figure.
The answer is a range, not a number. For a single person wanting the moderate standard of £31,700 a year, the arithmetic gives anywhere between roughly £479,000 and £638,000 depending only on whether you assume 4% or 3%. Nobody knows which is right.
Treat any figure, including these, as illustrative. This page is general information, not advice, and the assumptions do more work than the sums.
Work backwards, not forwards
Most retirement calculators ask what you have and tell you what it will become. That is a projection, and it depends on decades of investment returns nobody can forecast. It also produces a single confident number, which is exactly the wrong shape of answer for a question this uncertain.
The more useful question runs the other way. Decide what annual income you would want. Work out how much of that arrives without you doing anything, which for most people means the State Pension. Whatever remains has to come from your own savings, and there is a simple relationship between an income and the capital needed to sustain it.
That approach has an honest limitation built into it, which is that the relationship depends entirely on a withdrawal rate you have to assume. The advantage is that the assumption is visible and you can move it, rather than being buried in a projection.
Deciding on a target income
The most widely used independent benchmark in the UK is the Retirement Living Standards, published by the Pensions and Lifetime Savings Association and researched by the Centre for Research in Social Policy at Loughborough University. They describe three lifestyles rather than prescribing one, which makes them more useful than a single recommended figure.
| Standard | Single person | Couple |
|---|---|---|
| Minimum | £13,400 a year | £21,600 a year |
| Moderate | £31,700 a year | £43,900 a year |
| Comfortable | £43,900 a year | £60,600 a year |
These are the figures from the 2025 update, for households outside London. Three things about them matter more than the numbers themselves.
They are after tax. They describe spending power, not gross income, which means a pension has to produce more than these amounts to deliver them.
They assume housing costs are already covered, meaning no rent and no mortgage. If you expect to be renting in retirement, or still paying a mortgage, that cost sits on top of every figure in the table.
They include the State Pension as part of the total. They are not the amount your own savings need to produce.
The PLSA also publishes higher figures for London. I have left those out because the published supplements and the London totals quoted in secondary sources do not reconcile with each other, and a figure I cannot make add up is not one I am willing to print. If you live in London, take the national figures as a floor and read the PLSA's own materials directly.
What the State Pension covers
From 6 April 2026, following a 4.8% triple lock increase, the full new State Pension is £241.30 a week, which is £12,547.60 a year. The basic State Pension, for people who reached State Pension age before April 2016, is £184.90 a week.
Two conditions decide whether you get the full amount. You generally need 35 qualifying years of National Insurance contributions or credits for the full new State Pension, and at least 10 qualifying years to receive any of it at all. Between those points entitlement is broadly proportionate, subject to transitional rules for anyone with a record predating 2016.
Set against the minimum standard of £13,400, a full State Pension gets a single person most of the way there, leaving a gap of around £850 a year. Against the moderate standard it covers rather less than half.
Turning an income into a capital figure
The arithmetic is deliberately simple, because complicated arithmetic would imply a precision that is not available here.
capital needed = (target income − State Pension) ÷ withdrawal rate
Take a single person outside London aiming at the moderate standard. The target is £31,700 a year. A full State Pension provides £12,547.60, leaving £19,152.40 a year that their own savings have to produce. Dividing by a withdrawal rate gives the capital figure.
| Withdrawal rate | Capital implied |
|---|---|
| 3.0% | About £638,000 |
| 3.5% | About £547,000 |
| 4.0% | About £479,000 |
The same exercise for the comfortable standard of £43,900 leaves £31,352 a year to fund, implying roughly £784,000 at 4% and £1,045,000 at 3%.
Notice what has happened. Changing one assumption, by an amount no expert can adjudicate, moves the answer by more than £150,000. That spread is not a flaw in the method. It is the most truthful thing the method produces, and any calculator that hands you a single number has hidden it.
Why the withdrawal rate is the whole argument
The familiar 4% rule came from American research using American market history: withdraw 4% of the pot in year one, increase it with inflation each year after, and it is unlikely to run out over thirty years.
UK-focused work generally lands lower. Morningstar's UK analysis put the highest safe starting withdrawal rate at 3.7% in 2024 and 3.9% in 2025, for a thirty-year horizon at 90% confidence with a portfolio holding 30% to 50% equities. Other UK analyses come out lower again once platform and fund charges are taken off, with some suggesting figures closer to 3%.
The reasons for the gap are worth understanding rather than memorising. UK equity and bond history differs from the American dataset the original rule was built on. Charges and the UK tax treatment of investment income both erode the sustainable figure. And sequence of returns risk means a poor few years immediately after you stop working does far more damage than the same years later on, because you are selling assets to live while they are cheap.
There is also a criticism that applies to any fixed percentage, which is that it assumes a rigidity nobody has. Real retirees spend less in bad years, and modelling that flexibility tends to support a higher starting rate than the fixed rules allow. That cuts in the opposite direction to everything above, which is precisely why a range is the honest presentation.
Tax makes the number bigger
This is the part most retirement content skips, and it is worth a paragraph because it is not small.
The State Pension is taxable income, though it is paid without tax deducted at source. At £12,547.60 a year it sits just under the £12,570 Personal Allowance, which is frozen until 2030. That leaves roughly £22 of allowance unused, so income drawn from private pensions on top of a full State Pension is very largely taxable.
Because the Retirement Living Standards are after-tax figures, the £19,152 in the worked example above is what you need to receive, not what you need to draw. Grossing that up at basic rate takes it to roughly £23,935 a year, which at the same three withdrawal rates implies capital of about £598,000 at 4%, £684,000 at 3.5% and £798,000 at 3%.
Pulling the other way, pension rules allow part of what you take out to be free of tax, which reduces the requirement again. This guide does not model that, because doing it properly means engaging with rules that turn on your own circumstances. The practical position is that the pre-tax figures understate the requirement and the grossed-up figures overstate it, and the truthful answer sits somewhere between the two.
What this calculation ignores
Being clear about this is more useful than adding features, so here is what the method above does not do.
- It assumes you already own your home outright. That assumption is inherited from the Retirement Living Standards. Rent or a remaining mortgage has to be added to the target income before you start.
- It treats retirement spending as flat. In practice spending is often higher in the early active years, lower in the middle, and higher again if care is needed later.
- It ignores everything except pensions and the State Pension. Other savings, property, inheritance, part-time work and a partner's income all change the picture.
- It says nothing about when you stop working. State Pension age is currently 66 and is rising to 67, phased in between May 2026 and March 2028. Retiring before your State Pension starts means funding those years entirely yourself, which is a separate and larger calculation.
- It does not model investment risk at all. A withdrawal rate is a summary of a distribution of outcomes, not a promise about any one of them.
- It uses today's money throughout. That is deliberate, since it keeps the figures meaningful, but it means the actual pounds you will need decades from now are larger.
If the number looks impossible
For most people reading this, it will. Six-figure sums presented flatly are discouraging, so it is worth saying what the figure does and does not mean.
It is not a target you have to reach alone, and it is not a pass mark. Workplace pension contributions from an employer do a substantial part of the work over a career, and anything already accrued in old schemes counts towards it. The State Pension, which the calculation has already deducted, is itself the equivalent of a very large capital sum that you do not have to fund.
The figure also responds to more levers than it first appears. Working two years longer shortens the period being funded and lengthens the period of saving, which moves the number twice. Aiming at the moderate standard rather than the comfortable one changes the requirement by hundreds of thousands. Clearing a mortgage before retiring removes a cost the standards assume is already gone.
The most useful thing to take from this is direction rather than a destination. Knowing that a moderate retirement implies a pot in the hundreds of thousands tells you whether the current contribution rate is roughly right or badly short, and that is a question worth answering years before the exact figure matters.
See the effect of time Compound interest calculatorHow contributions and growth build over decades, and how much difference starting earlier makes. Nothing you enter is stored or transmitted.
Work back from a target Savings goal calculatorWhat a given target requires each month over a given period, and what changing either does to the other.
What changes, and when
Almost every figure on this page moves, so here is when to distrust it.
The State Pension is uprated each April under the triple lock, so the figures above apply to the 2026/27 tax year and will change from April 2027. The Retirement Living Standards are usually updated annually, and the figures here come from the 2025 update. The Personal Allowance is frozen at £12,570 until 2030 under current policy, though fiscal events can change that. The rise in State Pension age to 68 is currently legislated for 2044 to 2046, and a statutory review is under way that must report by March 2029, so the timing may yet move.