Important information - the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.
How much will you spend every year in retirement? Figuring this out can feel like an impossible task. Thankfully, somebody has already done a lot of the legwork.
Every year, Pensions UK calculates how much minimum, moderate and comfortable standards of retirement cost. This simple framework - which is based on discussions with people across the UK - reflects everyday outgoings like food and transport, as well as social activities, holidays and hobbies.
- Looking for personalised financial advice? Our advisory service can help you plan for your next step
How much does a year of retirement cost?
How much retirement costs depends heavily on your lifestyle. Are you a jetsetter who loves home renovation? Or are you planning to live more frugally? A less obvious consideration is whether you have a partner: single pensioners face significantly higher outgoings than those who live with someone else.
These factors are reflected in the Retirement Living Standards. The figures below show how much you are likely to spend each year, depending on your lifestyle bracket.
| Minimum | Moderate | Comfortable | |
|---|---|---|---|
| A single retiree | £13,900 a year | £32,700 a year | £45,400 a year |
| One retiree living in a two-person household | £11,250 a year | £22,700 a year | £31,350 a year |
| What standard of living could you have? | Covers all your needs, with some left over for fun | More financial security and flexibility | More financial freedom and some luxuries |
Source: Pensions UK, 03.06.26
Other important factors
Pension UK’s figures reflect yearly spending. Given you’ll still be paying tax in retirement, the total income you’ll need to facilitate your spending will be higher.
However, not all of it has to come from you. The State Pension plays a central role in most people’s retirement income. The full new State Pension is £241.30 a week in 2026/27, or £12,548 a year.
A single retiree
| Standard of retirement | Income needed after tax | Income needed before tax | State Pension | Income needed from your pension savings |
|---|---|---|---|---|
| Minimum | £13,900 | £14,232 | £12,548 | £1,684 |
| Moderate | £32,700 | £37,732 | £12,548 | £25,184 |
| Comfortable | £45,400 | £54,720 | £12,548 | £42,172 |
Source: Pensions UK, 03.06.26
One retiree living in a two-person household
| Standard | Income needed after tax | Income needed before tax | State Pension | Income needed from your pension savings |
|---|---|---|---|---|
| Minimum | £11,250 | £11,250 | £12,548 | £0 - income will be covered by State Pension |
| Moderate | £22,700 | £25,232 | £12,548 | £12,684 |
| Comfortable | £31,350 | £36,045 | £12,548 | £23,497 |
Source: Pensions UK, 03.06.26
How much do I need to save in total?
There are two main ways to generate income in retirement: you can draw on your pension flexibly, or you can buy an annuity.
Pensions UK focuses on the annuity route and has published an approximate guide to the level of pension savings that you might need to meet each standard.
| Retirement standard | Rough size of private pension pot a single retiree may need | Rough size of private pension pot one retiree in two-person household may need |
|---|---|---|
| Minimum | £23k to £34k | £0 - income will be covered by State Pension |
| Moderate | £335k to £505k | £170k to £255k |
| Comfortable | £560k to £845k | £315k to £470k |
Source: Pensions UK, 03.06.26
Fidelity also has several tools to help you achieve the best possible retirement, including interactive calculators and written guides.
What do the numbers leave out?
These figures are a very useful starting point for retirement planning. However, they make some big assumptions. The first is that you will be living mortgage and rent-free. This is still what most of the population close to retirement will achieve in the next few years - but it is obviously not guaranteed.
The second assumption is that you will receive the full new State Pension.
The final consideration is the cost of care. More of us are facing hefty care home fees and other medical bills as life expectancies increase. Pension UK’s ‘basket of goods’ does not include these outgoings, so it may be necessary to spend more than the headline figures suggest.
Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Eligibility to invest in a pension and tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
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