Short answer: the Pensions and Lifetime Savings Association publishes what three standards of retirement cost. For one person: Minimum £13,900, Moderate £32,700, Comfortable £45,400 a year after tax; for a couple £22,500, £45,400 and £62,700. A full new state pension is £12,548 a year each. The pot you need fills the gap between the two — roughly £0 for a single person at Minimum, about £500,000 for Moderate and £800,000 for Comfortable by the common 4% rule of thumb, though a plan with your own numbers usually gives a different, and better, answer.
What the standards buy
The PLSA figures are costs, not incomes, and assume you own your home outright. Moderate for a single person means a car, a fortnight in Europe and some long weekends, £55 a week on food, a few meals out, and about £1,000 a year for gifts and helping family. Comfortable adds a three-week holiday, a newer car every five years and more for clothing and hobbies. Minimum covers the essentials with one UK holiday and no car.
The gap the pot has to fill
| Standard, one person | Cost a year | State pension | Gap a year | Pot at 4% | Pot at 3.5% |
|---|---|---|---|---|---|
| Minimum | £13,900 | £12,548 | £1,352 | £34,000 | £39,000 |
| Moderate | £32,700 | £12,548 | £20,152 | £504,000 | £576,000 |
| Comfortable | £45,400 | £12,548 | £32,852 | £821,000 | £939,000 |
| Standard, a couple | Cost a year | Two state pensions | Gap a year | Pot at 4% | Pot at 3.5% |
|---|---|---|---|---|---|
| Minimum | £22,500 | £25,096 | none | £0 | £0 |
| Moderate | £45,400 | £25,096 | £20,304 | £508,000 | £580,000 |
| Comfortable | £62,700 | £25,096 | £37,604 | £940,000 | £1,074,000 |
The "4% rule" — draw 4% of the pot in the first year and raise it with inflation — comes from US history; UK studies put a safe starting rate nearer 3 to 3.5%, which is why the second pot column is larger. Both ignore tax on withdrawals, the timing of the state pension, and whether you retire before it starts.
Why a plan beats the rule of thumb
A proper year-by-year plan changes the answer in both directions:
- Retiring before state pension age means the pot carries the whole cost for the first years — the most common reason people need more than the table says.
- Income tax. The gap above is after tax; a pension pays taxable income, and the state pension already uses almost all of the personal allowance, so you need to draw more than the gap. For Moderate, about £25,200 gross a year rather than £20,152 — which by the 4% rule means a pot nearer £630,000 than £504,000.
- A spending pattern that falls with age, an ISA alongside the pension, part-time work, a downsize or an inheritance all reduce the pot required.
- The order you draw from — cash, ISAs and pensions — moves lifetime tax by tens of thousands.
Money Horizon solves the actual number: the most your savings can pay every year, rising with inflation, to the age you choose — and tells you which PLSA standard that reaches. Setting the target is one click: the details panel offers the Minimum, Moderate and Comfortable figures for a single person or a couple, and the two-thirds-of-salary rule of thumb. The Pot goal calculator does the reverse — what to save each month to reach a pot at an age.
Getting the state pension right first
The full amount needs 35 qualifying years of National Insurance; fewer years means less. Missing years can often be bought: a Class 3 year costs about £923 and adds about £358 a year for life, so it pays back in under three years of retirement. Money Horizon's State pension top-up calculator shows the case for your record.
Questions people ask
Are the PLSA figures before or after tax? After tax — they are what you spend. Income from a pension is taxable above the personal allowance, so the gross income needed is higher.
Do the standards include rent or a mortgage? No. They assume you own your home outright. Rent or a remaining mortgage comes on top.
How much do I need to retire at 60 on a moderate standard? Seven years before the state pension starts at 67, the pot pays the whole £32,700 a year itself — about £229,000 over the seven years before tax and growth are counted — on top of the pot needed from 67. The planner shows the exact figure for your ages, tax and returns.
Is £500,000 enough to retire on? For one person with a full state pension, £500,000 supports about the Moderate standard from state pension age by the 4% rule; from 60 it does not. For a couple with two state pensions it also reaches Moderate. Whether it holds through a bad decade is what the stress tests are for.
Where do these figures come from? The PLSA Retirement Living Standards, updated 2025 (retirementlivingstandards.org.uk); the state pension figure is the 2026-27 full new state pension. Money Horizon dates every figure on its assumptions page.