You’re not the only one who has looked at their pension and wondered, “Will this be enough?” The cost of living is always going up, and retirement could last twenty years. It’s very important to know how much money you’ll need as a pensioner in the UK.
I’ve gathered the latest 2025 figures to help you understand exactly what you need for different retirement lifestyles. Whether you’re planning ahead or already retired, this guide will give you the facts about pensioner living costs in today’s Britain.
The Three Retirement Lifestyle Standards
Pensions UK (formerly the Pensions and Lifetime Savings Association) has updated their Retirement Living Standards for 2025, giving us a clear picture of what different retirement lifestyles actually cost. They break it down into three levels:
Minimum Standard (Covering basics with a bit extra)
- One-person household: £13,400 per year
- Two-person household: £21,600 per year
At this level, you can meet all of your basic needs and still have some money left over for fun. The State Pension, which is currently £11,973 a year, helps pay for this level, but it won’t quite cover it for one person.
Moderate Standard (More financial flexibility)
- One-person household: £31,700 per year
- Two-person household: £43,900 per year
This level provides greater financial security and more lifestyle choices.
Comfortable Standard (Financial freedom with some luxuries)
- One-person household: £43,900 per year
- Two-person household: £60,600 per year
This lifestyle allows for more spontaneity and some genuine luxuries
What Each Lifestyle Actually Includes
Even though it’s helpful to know the numbers, what do they mean in real life? Let’s look at what each standard includes:
Minimum Standard (£13,400 for one person)
- Food: About £55 weekly on groceries, £30 monthly for eating out, £12 monthly on takeaways
- Transport: No car, free bus pass, £30 monthly for taxis, £180 yearly for train journeys
- Holidays: One week in the UK annually
- Home maintenance: £200 annually for DIY
- Leisure: TV license, broadband with one streaming service (with ads), £20 weekly for activities
- Gifts: £20 for each birthday and Christmas present
Moderate Standard (£31,700 for one person)
- Food: Around £56 weekly on groceries, £32 weekly on food out, £11 weekly on takeaways, £106 monthly for taking others out
- Transport: Small 3-year-old car replaced every 7 years, £22 monthly on taxis
- Holidays: Two-week 3* all-inclusive Mediterranean holiday plus a long UK weekend break
- Home maintenance: £500 annually plus £300 contingency
- Leisure: Two streaming services, £43 weekly for activities
- Gifts: £30 per gift, £200 yearly to charity, £1,000 annually for supporting family
Comfortable Standard (£43,900 for one person)
- Food: £75 weekly on groceries, £42 weekly on eating out, £21 weekly on takeaways
- Transport: 3-year-old car replaced every 5 years
- Holidays: Two-week 4* Mediterranean holiday with £100 spending money, plus three long UK weekend breaks with £400 spending money each
- Home maintenance: £600 annually plus £300 contingency
- Leisure: Comprehensive entertainment package, £54 weekly for activities
- Gifts: £50 per gift, £300 yearly charity donations
Important Cost Factors to Consider
When planning your retirement budget, remember that these figures:
- Assume you own your home outright with no mortgage – if you’re still paying rent or a mortgage, you’ll need to add this cost
- Don’t include income tax on your pension withdrawals
- Don’t account for care costs which might become necessary later in life
- Represent expenditure, not income – your actual income needs may be higher to cover taxes
How Much Pension Pot Would You Need?
According to recent analysis by Quilter, to generate the annual income needed through an annuity:
For a single person:
- Moderate lifestyle (£31,700): £459,000 pension pot
- Comfortable lifestyle (£43,900): £738,000 pension pot
For a couple:
- Moderate lifestyle (£43,900): £515,000 pension pot
- Comfortable lifestyle (£60,600): £929,000 pension pot
These calculations assume annuity rates of 5.34% for individuals and 4.79% for couples.
If you prefer income drawdown instead of an annuity, AJ Bell estimates you’d need:
For a single person:
- Moderate lifestyle: £490,000 pension pot
- Comfortable lifestyle: £790,000 pension pot
For a couple:
- Moderate lifestyle: £515,000 pension pot
- Comfortable lifestyle: £890,000 pension pot
These figures assume 4% annual investment returns after charges, income rising by 2% yearly, and the pot lasting 25 years.
How Much to Save Depending on Your Age
Starting to save early makes it easier to build up a big pension pot. To save £100 a month and retire at age 70, here’s how much you’d need to put away each month:
To achieve £20,000 annual retirement income (excluding State Pension):
- Starting at age 20: £210 monthly
- Starting at age 30: £320 monthly
- Starting at age 40: £520 monthly
- Starting at age 50: £910 monthly
With State Pension included, for £20,000 annual retirement income:
- Starting at age 20: £80 monthly
- Starting at age 30: £140 monthly
- Starting at age 40: £250 monthly
- Starting at age 50: £460 monthly
Changes in Retirement Costs for 2025
The latest data from Pensions UK shows some interesting changes in retirement costs:
- The cost of a comfortable retirement has increased from £43,100 to £43,900 for individuals
- For two-person households, comfortable retirement costs rose from £59,000 to £60,600
- Moderate retirement costs for individuals increased slightly from £31,300 to £31,700
- Surprisingly, the cost of a minimum retirement has actually fallen from £14,400 to £13,400 (nearly 7%)
This decrease in minimum costs is largely due to falling energy prices – weekly domestic fuel budgets have dropped by more than a quarter since last year. For moderate and comfortable households, energy costs have fallen by £16.74 and £15.38 per week respectively.
Finding Extra Money for Your Pension
If your current pension savings aren’t on track, here are some ways you could free up extra cash for contributions:
- £250 monthly by cooking at home instead of restaurant dining
- £108 monthly by bringing packed lunch to work
- £100 monthly by switching to own-brand products
- £47 monthly by making coffee at home
- £26 monthly by switching utility providers and banks
Even small increases in pension contributions can have significant impacts on your retirement fund, especially if you start early.
Living Arrangements in Retirement
Interestingly, Pensions UK’s research shows that most retirees (75%) live with family members – not just romantic partners, but sometimes children, parents or other relatives. Only 22% live alone, and 3% live with non-family members.
For future retirees, 77% expect to live with someone else during retirement, with only 23% expecting to live alone. This suggests many people are open to shared living arrangements to stretch pension income further.
Changes to Tax and Pension Rules
From April 2027, pensions will be included in estates for inheritance tax calculations. This means any unspent pension money when you die could form part of your estate, potentially incurring inheritance tax and affecting how much you can leave to loved ones.
Some experts warn this could result in an effective tax rate of up to 67% in some cases, which might affect your retirement and inheritance planning.
My Final Thoughts
Working out how much a UK pensioner needs to live on isn’t a simple one-size-fits-all answer. Your personal circumstances, living arrangements, health needs and desired lifestyle all play massive roles in determining the right figure for you.
The good news is that with proper planning, most people can achieve at least a moderate retirement standard. The earlier you start saving and the more consistently you contribute to your pension, the better your chances of enjoying financial security in your golden years.
Remember that these standards assume you own your home outright – if you’re renting or still paying a mortgage in retirement, you’ll need to factor in those additional costs when planning.
Whether you’re aiming for a minimum, moderate or comfortable retirement, understanding these benchmarks gives you a concrete target to aim for. And with the State Pension covering a significant portion of minimum retirement needs, additional savings through workplace and private pensions can help bridge the gap to your desired lifestyle.
Have you started planning for your retirement yet? It’s never too early – or too late – to begin!
How does average retirement income compare to average earnings?
The difference between how much money the average retiree has and how much money the average worker has is interesting.
According to government data from March 2025, the average UK full-time worker earns £36,972 annually. After income tax, national insurance, and 5% pension contributions (the recommended minimum), this is reduced to £28,660.
On the face of it, this is around over double the average single pensioner’s income of £14,664.
But this doesn’t take into account how much groceries, utilities, and housing have cost more in the last few years.
The average UK mortgage payment is £950 a month or £11,410 per year, according to Zoopla, a 40% increase since 2021.
While the retired generation may largely own their homes outright and have no further mortgage payments, the working generation is spending a large chunk of its higher income on rent or mortgage payments.
Can I live comfortably on the average retirement income?
From what we’ve seen so far, the average retired income may not be that different from the average wage earner’s in terms of extra money they can spend.
But this doesn’t necessarily mean that such an income provides a comfortable or desired standard of living (since many wage earners still consider themselves to be struggling or ‘just getting by’).
So what makes a ‘comfortable’ retirement income?
Ultimately, it depends on how you want to spend your retirement.
Research by the Pensions and Lifetime Savings Association (PLSA) suggests a couple in the UK needs an annual combined income of £59,000 after tax to have a retirement with few or no money worries, while a single person would need £43,100.
This estimate assumes a lifestyle that includes:
- A four-star vacation every two weeks in the Mediterranean and three long weekends in the UK every year.
- It costs about £70 a week for food, £40 a week for food out, £20 a week for takeout, and £100 a month to take other people out to eat.
- £1,500 worth of clothes and footwear per person annually
These assumptions aren’t extravagant, but they aren’t penny-pinching either.
So if you see yourself living more modestly, such as taking shorter UK-based holidays, doing cheaper food shops and buying fewer new clothes, you could get by on much less.
Research suggests an annual income of £12,800 per person is enough for a frugal retirement – but any less might mean making some big sacrifices.
To give you an idea of how much you would need to save, a £100,000 pension pot could give you an income of between £4,000 to £5,000 a year, plus a lump sum of £25,000 tax-free cash.
This doesn’t sound like much, but if you are also receiving the full new state pension, the total could be between £15,900 and £17,000 per year (plus the tax-free lump sum).
Bear in mind that the state pension age is set to rise in the future. Based on these figures, it’s good to aim for a pension pot of at least £100,000 or preferably more.
Fortunately, this is realistically achievable, as shown in our article about how much you should pay into your pension.
How Much Pension Is Enough? Real Retirement Budgets from UK Pensioners (2025/26) for you to compare.
FAQ
How much does a retired person need to live in the UK?
| Retirement Living Standard | Annual Expenditure | Approx Fund Size Required if Purchasing an Annuity** |
|---|---|---|
| COMFORTABLE | £43,900 | £540k-800k |
| MODERATE | £31,700 | £330k-490k |
| MINIMUM | £13,400 | £20k-3k |
What does the average pensioner live on in the UK?
On face value the question of ‘what is the average’ is a simple one, the answer is £595 per week (£30,940 p. a. ) for a retired couple and £282 per week (£14,664 p. a. ) for a single retiree as per the most up to date Government Pensioners’ Income figures.
Can I retire at 60 with 300k in the UK?
£300k in a pension isn’t a huge amount to retire on at the fairly young age of 60, but it’s possible for certain lifestyles depending on how your pension fund performs while you’re retired and how much you need to live on.
What is the minimum a pensioner can live on?
MinimumOne person household£13,400 a yearWhat standard of living could you have?Covers all your needs, with some left over for funHouseDIY £200 a year to maintain condition of your property. FoodAround £55 a week on groceries, £30 a month on food out of the home, £12 per month on takeaways.
What is the average pension income in the UK?
The UK government’s most recent data for 2024 shows the average weekly income for single pensioners to be £282. This works out at around £14,664 per year. The average retirement income in the UK is also affected by regions. If you live in London, you’re likely to have less than the average retirement income.
How much money do you need to retire in the UK?
Research by the Pensions and Lifetime Savings Association (PLSA) suggests a couple in the UK needs an annual combined income of £59,000 after tax to have a retirement with few or no money worries, while a single person would need £43,100. This estimate assumes a lifestyle that includes:
How much retirement income should I receive from my private pension?
Find out how much retirement income you might receive from your private pension and how to boost it by using our pension calculator below. This is less than 66% of your current income. 66% is considered comfortable income level for retirement. Try adjusting the values below to reach the target. Want to boost your pension?.
What is the average UK retirement income?
The average UK retirement income is £18,148 per year. This figure includes income from all sources, such as the state pension, private pensions, and investments. However, there is a wide variation in retirement incomes. Some pensioners have very little income, while others have a comfortable income.
Do you live in London or Scotland if you have a pension?
If you live in London, you’re likely to have less than the average retirement income. But if you’re based in Scotland or the North East, you’ll likely have more to spend on average. The gap generally comes down to a difference in living and housing costs. In 2024, 70% of pensioners received income from a private pension.
How much should I put away for my pension?
Your retirement could last 20 to 30 years, which means you may need to live on your pension for a long time. This will affect how much you need to save for your pension. If you start saving for your pension early in your working life it may be difficult to predict what your needs will be when you retire.