Retirement answers you can trust
Household spending varies widely based on individual needs, which makes predicting exactly how much money you'll need in retirement, and therefore need to save for the future, hard to pin down.
As a rule of thumb, you should aim to save around 12% of your earnings each year, across your working life.
Important information: Money in a pension is usually accessible from age 55 (rising to 57 in 2028). This isn’t advice. If you’re not sure what’s right for you, please ask for advice. *Opinium poll for HL. April 2024, 2,000 respondents.
Typical yearly spending in later life
In retirement, people's spending tends to change.
To help you work out what you might spend in retirement, we’ve outlined three examples below.
We've given a range between what the lowest and highest income households spend in later life (aged 65-74).
Income bracket
Lowest £12,687
Middle £26,551
Highest £43,904
How much do I need to retire?
Most households will be entitled to the State Pension, but its unlikely to be enough to live off.
It's therefore important to understand how big your total retirement savings pot will need to be, to make up for any short falls. This pot could include any pensions, and investment accounts.
- The current new full State Pension will pay £23,004 each year (per couple). This more than covers the lowest yearly household spending of £12,678.
- For the middle yearly spending, you'll need an additional combined pot of around £89,000 per household.
- For the higher yearly spending, you'll need an additional combined pot of around £523,000 per household.
Curious about how much your pension might pay in retirement? Use this essential calculator to find out.
These figures assume a 4% withdrawal rate from your investments. They don't take into account tax.
Get advice on your retirement plans
Retirement is a time when you may feel unsure about what to do with your money and need help to make decisions.
Our financial advisers can work with you to plan your retirement income strategy. They can also make sure your investments match your goals and give you advice on when and how to take your pension.
Which retirement option is right for me?
Compare the benefits and risks of each option.
Self-employed or run your own business?
Discover how a pension can help you cut your tax bill. Pension and tax rules can change, and benefits depend on your circumstances.
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