An elderly woman figuring out how much money they need to retire

How much money do I need to retire?

Many people spend their career looking forward to retirement. It's a time when you can leave work behind and enjoy the simple things in life, right?

Well, when retirement becomes reality, days on the golf course can soon be replaced by stressing over finances, if you haven't planned accordingly.

Although 4 in 5 of us have a workplace pension, one recent study found that only 1 in 5 Brits actually save enough to retire with their desired lifestyle. It seems there is a drastic disconnect on how much we actually need to be saving, but that's exactly what we're here to help with. 


  • Many Brits aren't contributing enough to live their desired lifestyle come retirement

  • It's been found a couple in the UK need an annual combined income of £47,500 to have a comfortable retirement

  • A single person would need an annual income of £33,000 for a comfortable retirement

  • You can budget your expected expenses come retirement, and work backwards to see how much you need to have saved

  • We've listed 3 quick rules of thumb when it comes to saving for retirement

Show me the money

Okay, so the real reason you're here - how much money you need to save?

As a general rule, financial advisors typically recommend you save 10-12 times your current annual salary by the time you reach retirement.

The average U.K salary in 2022 was £33,000, meaning a pension pot between £333,000 to £396,000 could be a good indication for someone earning an average amount.

But, we're here to help you find your exact amount (or as close to as possible). To do this, create a budget and total up how much the following factors are likely to cost you on a yearly/ monthly basis:

  • Housing - how much does your mortgage/ rent cost you?

  • Utility bills - your heating and water bills. Are they likely to increase as you retire?

  • Food - how much your food shop is. You may find yourself eating out more once you retire, racking up your food expenses!

  • Transport - fuel, car insurance and public transport costs. Perhaps no longer having a commute will give you more disposable income.

  • Entertainment - this is likely to increase as you retire, as you'll have more free time.

  • Your lifestyle - do you want to travel, pursue hobbies or even relocate?

  • Taxes - you will still be responsible for paying taxes on your income and on any withdrawals from your retirement accounts

  • Miscellaneous expenses - as clothing, personal care, gifts and subscriptions

Once you have a strong idea of your overall expenses, it's good to look at the PLSA's (Pensions and Lifetime Savings Association) calculations on how much it thinks people need on average during retirement in its 'retirement living standards’ data. It splits people into 3 categories, depending on how much they wish to spend:

  • Minimum - for a single person this is £10,200 and for a couple it’s £15,700 which would cover basic costs with some extra money for leisure activities

  • Moderate - for a single person this is £20,200 and a couple would need £29,100 which would provide a little more financial flexibility and security

  • Comfortable - for a single person this is £33,000 and a couple would need £47,500 which would allow for financial security and some luxuries

🤓 Nerd moment - why is a couple's total not just double a single person's? It's assumed some costs such as mortgages, utilities and other expenses are shared.
Green ornament
Comfortable, moderate or minimum money amounts needed for a single person and couple in retirement

So, match up your forecasted costs and see which category out of minimum, moderate and comfortable you fall into. 

How do I know how much to save?

Okay, you now know how much you need each year. But how much does that mean you must have saved in total? Simply use this calculator to figure this out - plug in your details, and it'll do the rest!

It might be that you desire a comfortable lifestyle, but you aren't on track for it. In this case, you'll need to start contributing more to your pension.

General rules of thumb for retirement saving

  • Whatever your salary is, multiply it by 10. This is how much your pension pot should be

  • Each year of retirement, you'll need around 2/3s of your latest annual income

  • Your age divided by 2 is the % amount you should contribute to your pension, from your salary

For example, let's say Maggy is 30 years old and she's earning £33,000 a year. She would want to:

  • Aim to have a total pension pot of £330,000 (33,000 x 10 = 333,000)

  • Require around £22,000 a year (2/3s of 33,000 is 22,000)

  • Currently contributing around £335 towards her pension every month (15% of her salary works out at £335 pension contributions per month)

Rules of thumb for retirement saving

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As with all investing, your capital is at risk. 

Shares does not provide investment advice. If you are unsure about anything, please seek advice from an authorised financial advisor. Shares is a trading name of Shares App Ltd. Shares App Ltd is an appointed representative of RiskSave Technologies Ltd, which is authorised and regulated by the Financial Conduct Authority.

Meet the authors

Lucy Burgess

Lucy Burgess

Head of Content

Lucy has spent the last 8 years working in fintech. It's safe to say she's pretty passionate about making finance welcoming to everyone.

James Ashoo photo

James Ashoo

Content Writer

James has been investing for over four years. His aim is to explain the hard stuff, easily! When he's not chewing your ear off about stocks and crypto, he'll most likely be telling bad jokes.

Harjas Singh

Harjas Singh

Chief Product Officer & Co-Founder

With a wealth of experience in fintech, Harjas is the man in the know when it comes to all things product. Investing features, chatting capabilities and thriving communities – he oversees all development on the Shares app!