The figures aren’t plucked from thin air. They’re based on detailed research into what members of the public consider necessary for a Minimum, Moderate and Comfortable retirement, covering areas such as food, household bills, transport, holidays, leisure and helping others.
Here are the latest 2026 figures:
|
Retirement lifestyle |
One person household |
Two person household |
|---|---|---|
|
Minimum |
£13,900 a year |
£22,500 a year |
|
Moderate |
£32,700 a year |
£45,400 a year |
|
Comfortable |
£45,400 a year |
£62,700 a year |
These are annual spending figures, not necessarily the gross income you need. That’s an important distinction because some pension income may be taxable.
And there’s another big catch we’ll come to shortly: rent and mortgage payments aren’t included.
First, though, what do these three lifestyles actually mean?
Minimum: £13,900 for one person or £22,500 for two
“Minimum” doesn’t mean sitting at home with the heating off and eating beans on toast.
The standard is intended to cover your basic needs while leaving some money for enjoying life.
For example, MoneyHelper describes the Minimum level as covering essentials such as food and clothing as well as a week’s UK holiday.
It’s a relatively modest retirement, though.
There isn’t much room for expensive holidays, frequent meals out, replacing cars regularly or absorbing large unexpected costs.
Think of it as:
The essentials are covered and there’s a little left for enjoying yourself.
The interesting comparison is with the State Pension.
From April 2026, the full new State Pension is £241.30 a week, equivalent to £12,547.60 a year. Your actual entitlement depends on your National Insurance record and can be lower.
So even somebody receiving the full new State Pension would still be slightly below the £13,900 Minimum expenditure benchmark if that were their only retirement income.
That’s why checking your own State Pension forecast matters rather than simply assuming you’ll receive the headline amount.
Moderate: £32,700 for one person or £45,400 for two
This is where retirement starts to provide considerably more flexibility.
The Moderate standard isn’t extravagant. It’s closer to what many people probably picture when they think about having enough money to enjoy retirement without constantly worrying about it.
MoneyHelper’s description includes allowances for two weeks abroad and a UK weekend break, alongside higher spending allowances elsewhere.
There’s room for eating out, hobbies, travel and maintaining a reasonable social life.
In other words:
You can make choices rather than simply cover costs.
And that distinction matters.
Retirement could last 20, 25 or 30 years. If you’ve spent decades looking forward to having more freedom, you’d probably rather not discover that you have plenty of time but can’t afford to do much with it.
Comfortable: £45,400 for one person or £62,700 for two
Then we reach the figure that tends to attract the headlines.
According to the latest research, a Comfortable retirement now costs:
£45,400 a year for a one-person household
or
£62,700 for a two-person household.
MoneyHelper describes this level as providing more luxuries, including an allowance for two premium weeks abroad and three UK weekend breaks.
This isn’t necessarily champagne and business-class flights.
It’s better thought of as having greater financial freedom.
You have more scope for travel and experiences. You can spend more on hobbies and leisure. Replacing things doesn’t automatically become a financial crisis. And there’s more room for generosity towards children, grandchildren, charities or other people who matter to you.
That’s probably closer to what many people mean when they say:
“I don’t need to be rich. I just want to be comfortable.”
The problem is that relatively few people currently appear to be heading there.
Only 9% are currently on track for a Comfortable retirement
This is perhaps the most striking finding in the latest research.
Pensions UK estimates that approximately:
82% of the working population are on track for the Minimum standard.
Only 23% are on track for Moderate.
And just 9% are expected to reach Comfortable.
Put another way, fewer than one in ten working people are currently projected to reach that Comfortable benchmark.
That doesn’t mean 91% of people are destined for a bad retirement. These are broad modelling benchmarks, not individual forecasts.
But it does highlight something worth taking seriously.
There can be quite a gap between the retirement we imagine and the retirement our current finances are actually building.
And the closer you get to retirement, the more useful it becomes to find out whether that gap exists.
OK, but how big a pension pot do you actually need?
This is where things become more complicated.
There’s no single correct pension pot figure.
Someone with a £400,000 defined contribution pension and no other retirement income is in a very different position from someone with £400,000 plus a substantial defined benefit pension.
Likewise, £500,000 means something quite different to somebody retiring at 55 than to somebody retiring at 67.
Your required pot depends on things including:
- when you retire
- your State Pension entitlement
- defined benefit/final salary pensions
- defined contribution pensions
- savings and investments
- whether you own your home
- tax
- how you take income from your pension
- investment returns
- inflation
- your spending
- and, ultimately, how long you live.
That’s why “How big is your pension pot?” isn’t really the right starting question.
A better question is:
How much annual income will my retirement resources provide, and is that enough to fund the life I want?
The State Pension makes a big difference
The full new State Pension for 2026/27 is:
£241.30 a week
or approximately:
£12,548 a year.
For two people who each qualify for the full amount, that’s roughly:
£25,095 a year combined.
Suddenly the retirement maths looks quite different.
Take the Comfortable benchmark for a two-person household:
£62,700 spending
versus approximately
£25,095 from two full new State Pensions.
There is still a sizeable gap to fund, but you don’t necessarily need your private pensions to generate the entire £62,700.
Of course, don’t automatically assume you’ll receive the full State Pension.
Your entitlement depends on your National Insurance history and other factors. The government’s State Pension forecast will tell you what you’re currently expected to receive.
Don’t confuse spending with income
This catches people out.
If the Comfortable standard says £45,400, that doesn’t mean £45,400 of gross pension income will necessarily fund it.
The Retirement Living Standards are measuring the amount spent to support the lifestyle.
Pension income can be subject to Income Tax, so the gross income required to produce that level of spending may be higher.
Your own position will depend on the sources of your retirement income and the tax treatment of each.
That’s another reason simple rules such as “I need £500,000” aren’t particularly helpful on their own.
The biggest omission: housing
There’s one assumption in these figures that you absolutely shouldn’t overlook.
Rent and mortgage payments are not included.
The Retirement Living Standards include ordinary household costs and basic maintenance, but exclude mortgage payments and rent because housing circumstances vary so widely.
For somebody approaching retirement with their mortgage paid off, that may be perfectly reasonable.
For somebody expecting to rent throughout retirement, it changes the calculation dramatically.
The underlying research illustrates just how dramatically.
For a one-person household outside London, the 2026 research estimated the Minimum annual expenditure at approximately:
- £13,902 with no rent
- £18,808 with social rent
- £20,731 with private rent
For a one person household in London, the estimated Minimum cost with private rent rises to around £32,089.
That’s an enormous difference.
So if you’re likely to retire with rent or a mortgage, add that expenditure to your retirement plan rather than relying on the headline numbers.
And don’t forget the costs that are personal to you
The standards are useful precisely because they give us a benchmark.
But they’re not your budget.
Some potentially significant costs aren’t included because they vary too much between individuals. Pensions UK specifically identifies areas including:
- Housing
- Social care
- Dependants
- Pets
and other personal expenses.
Then there are the things that are simply important to you.
Perhaps you want to spend three months abroad every winter.
Maybe you have two cars.
Perhaps you’re perfectly happy without a car at all.
You might want to help your grandchildren through university.
Or spend your retirement hiking, gardening and travelling around Britain in a campervan.
One person’s luxury is another person’s complete waste of money.
Which brings us back to where we started.
Don’t start with the money. Start with the life.
This might sound strange coming from an article about retirement finances.
But before deciding how much you need, spend some time thinking about what you’re actually funding.
Imagine an ordinary year in retirement.
Not the first six months when everything still feels like a holiday.
A normal year.
- Where do you live?
- How often do you travel?
- Do you still have a car?
- How often do you eat out?
- What hobbies do you have?
- Will you have memberships or subscriptions?
- Do you want to help your children or grandchildren?
- Will you spend more time at home?
- What will you do on a wet Tuesday afternoon in February?
That last question matters more than it might seem.
A retirement plan shouldn’t simply get you to the day you finish work.
It should help fund the life that comes afterwards.
A simple way to work out your number
You don’t need a 40 page financial plan to make a start.
Take it in five steps.
1. Work out what you spend now
Look at your actual household spending over the last year.
Bank statements are much more useful than guessing.
Separate spending into:
- Essentials housing, food, utilities, insurance and transport.
- Lifestyle restaurants, hobbies, entertainment and subscriptions.
- Experiences holidays, weekends away and days out.
- Other family support, pets, gifts and everything else.
You now have a baseline.
2. Remove the costs likely to disappear
Retirement may remove some significant expenses.
You might no longer have:
- commuting costs
- workplace lunches
- pension contributions
- mortgage payments
- professional expenses
- other costs associated with working.
Don’t assume they all disappear, though.
Your heating bill might increase because you’re home more often and let’s be honest energy prices are only going one wat at the moment, in the UK anyway. Then suddenly having seven Saturdays every week can create plenty of opportunities to spend money.
3. Add the things you want more of
This is the enjoyable bit.
- More travel?
- More meals out?
- Golf?
- Walking holidays?
- Concerts?
- A campervan?
- More time with grandchildren?
Put numbers against them.
A retirement budget should include the things that make retirement worth looking forward to.
4. Work out your likely guaranteed income
Start with your State Pension forecast.
Then add any defined benefit or final salary pensions and other reliable income.
Now compare that with your expected spending.
5. Identify the gap
Suppose your desired retirement costs:
£40,000 a year
and your secure/guaranteed income eventually provides:
£20,000 a year.
Your planning problem isn’t:
“Do I need £500,000?”
It’s:
“How do I sustainably fund the £20,000 annual gap?”
That’s a much more useful question to take into detailed retirement planning or a conversation with a regulated financial adviser.
What if your numbers don’t work?
Finding a shortfall isn’t failure.
Finding it before you retire is information.
And information gives you choices.
Depending on your circumstances, those choices might include working a little longer, increasing pension contributions, taking advantage of additional employer matching, reducing planned expenditure, paying off debt, changing your retirement date or gradually moving into part-time work.
MoneyHelper also suggests checking whether your employer will contribute more if you increase contributions, reviewing your State Pension record, tracing lost pensions and checking whether you’re entitled to National Insurance credits.
Even a few extra years can alter the picture because you’re potentially:
earning for longer + contributing for longer + allowing investments more time + funding fewer years entirely from retirement income.
And if you’re still several years away from retirement, there’s usually far more scope to adjust than there is once you’ve stopped working.
So, how much do you really need?
The latest research gives us a useful starting point:
- £13,900 / £22,500 for a Minimum retirement.
- £32,700 / £45,400 for a Moderate retirement.
- £45,400 / £62,700 for a Comfortable retirement.
Those are the 2026 figures for one-person and two person households respectively.
But none of those numbers is automatically your number.
Perhaps you could live very happily on less.
Perhaps the retirement you’re planning will cost considerably more.
That’s the point.
The aim isn’t to hit somebody else’s arbitrary pension target.
It’s to understand what a good retirement looks like to you, what it is likely to cost, what income you’re currently on track to receive and whether there’s a gap between the two.
Once you know that, retirement planning becomes a lot more tangible.
And usually a lot less intimidating.
Start with one simple question
If retirement is on your horizon, don’t try to solve everything today.
Start here:
If I stopped working tomorrow, how much would the life I actually want cost each year?
Then compare that with what you’re currently building.
You may discover you’re in better shape than you thought.
You may discover there’s some work to do.
Either outcome is useful, because you’ve replaced uncertainty with something you can actually plan around.
That’s what planning better is really about.
Ready to see where you stand?
Take the free GoodLifeBetter Retirement Readiness Assessment (available in the shop) to look beyond the pension pot and start thinking about the finances, lifestyle, health, purpose and plans that will shape your next chapter.
