Pension Calculator (UK)

UK Pension Planning Guide

How Much Do You Need to Retire?

The PLSA Retirement Living Standards: minimum lifestyle £14,400/year, moderate £31,300/year, comfortable £43,100/year (single person, 2024). The rule of thumb is a pension pot of 20-25× your desired annual income (derived from the 4% sustainable withdrawal rate). To generate £25,000 per year, you need approximately £500,000-625,000. The full new state pension (£11,502 in 2026/27) meaningfully reduces the private pot required.

The 4% Withdrawal Rule

The 4% rule (from the 1994 Trinity Study) suggests withdrawing 4% of your pot annually is sustainable for 30 years across most market conditions. At £500,000, that is £20,000 per year. Critics note the original study used US data — UK and global diversified portfolios support a 3.5-4% rate. With a longer retirement horizon (e.g., retiring at 60 with potential 30+ years), a more conservative 3-3.5% rate is often recommended.

Auto-Enrolment and Employer Contributions

Since 2012, UK employers must auto-enrol eligible employees into a workplace pension. Minimum total contributions are 8% of qualifying earnings: employee 5% (including 1% tax relief), employer 3%. Many employers match higher contributions — this is free money and should always be maximised. A 5% employer contribution on a £30,000 salary adds £1,500 per year to your pension, compounding over decades into a substantial sum.

State Pension 2026/27

The full new State Pension is £221.20 per week (£11,502 per year) for 2026/27. You need 35 qualifying National Insurance years for the full amount; 10 years minimum for any state pension. You can claim from age 66 (rising to 67 by 2028). Check your NI record via the government Gateway — gaps can often be filled by voluntary NI contributions (currently a highly cost-effective deal at £824.20 per year to buy one full qualifying year, adding approximately £328/year to your state pension permanently).