How much money will I need in retirement?

How to work out how much money you’re likely to need when you retire

Retirement needs calculator

One of the first steps in working out how much you’ll need to save into your pension is to calculate how much money you’re likely to need in retirement.

The income you may need will depend on the lifestyle you would like to have when you begin to take your retirement income. Answer three quick questions to get an idea of the income you will need for the lifestyle you would like.

  • Step 1/3

    About you

  • Step 2/3

    Living standards

  • Step 3/3

    Income required

Who will you be living with?

Living with a partner can work out a lot less per person than living alone. The costs used in this calculator reflect that, so think about what your situation might be when you come to retire, and choose one of the options below.

Where will you live?

Living costs in London are considerably higher than the rest of the UK and you should plan for that. Choose from the options where you think you will live.

Select options above to proceed

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Frequently asked questions

Is the State Pension enough to live on?

Your eligibility for the State Pension when you retire will depend on your National Insurance record. If you do qualify for it in full, the State Pension is currently £185.15 per week (at February 2023). Using this tool will show you that you’ll find it hard to live comfortably in retirement if the State Pension will be your only income.

However, the good news is that adding your State Pension to your workplace pension will make the income figures shown by this tool more achievable in retirement. Remember that if you have a partner, they may qualify for the State Pension, too.

How much pension will I get?

If you are a member of a ‘Defined Contribution’ pension scheme, how much income you will have in retirement will depend on various factors. These include how much you save into your pension while you are working, how long you save into the scheme for and how well the investments made with your pension savings perform. The best ways to get more information are to ask your scheme provider and to check your annual pension statement.

Alternatively, you may be a member of a ‘Defined Benefit’ scheme, in which your income in retirement will be based on other factors such as your final salary and the length of time you worked for the employer. You’ll still get the State Pension, too, if you qualify for it.

How do you know how much money you’ll need in retirement?

The figures in this tool are kindly provided by the Retirement Living Standards, calculated by the Pensions and Lifetime Savings Association and Loughborough University’s Centre for Research in Social Policy. You can find more information here.

How does inflation affect the cost of living in retirement?

The rising prices of essential goods and services, including the price of food, travel and utilities, have an obvious impact on the cost of living. Essentially, a fixed amount of money, such as a regular income from a pension, won’t stretch as far as it previously did. The figures in this tool are updated every year to reflect inflation and the rising costs of living.