Start with the income you'll need
Retirement planning works backwards from the income you'll want, not a magic pot size. A useful starting point is the Pensions and Lifetime Savings Association's 'Retirement Living Standards', which give rough annual income figures (for a single person, excluding housing costs) for three lifestyles — minimum, moderate and comfortable. These figures are updated periodically, so check the current ones. A common rule of thumb is needing roughly two-thirds of your working income to maintain your lifestyle, though this varies hugely with your circumstances, whether your mortgage is paid off, and the retirement you want. Our free retirement planner helps map your target.
Work out what you're on track for
Add up your expected income sources. First, the State Pension — check your forecast on gov.uk, as it tells you what you'll get and when (and whether topping up National Insurance gaps is worthwhile). Then your pensions: trace every workplace and private pension (use the free government Pension Tracing Service for lost ones), and find the total. A very rough guide some use is that a pension pot provides a sustainable income of around 4% a year, so a £200,000 pot might give roughly £8,000 a year plus your State Pension — but this is a simplification, and how you access it matters. Our free pension tracker and finances checklist help.
Close the gap — and get help with big decisions
If there's a gap between what you'll have and what you'll need, the levers are: contribute more to your pension (especially capturing any employer match — free money), work a little longer or part-time, reduce your expected costs (clearing the mortgage makes a big difference), or adjust the retirement lifestyle you're planning for. Time is your biggest ally — small increases now compound significantly. For the major, complex decisions (how to access pensions, tax efficiency, consolidation), use Pension Wise (free government guidance for over-50s) and consider a regulated independent financial adviser — the sums involved usually justify the cost, and pension scams target people approaching retirement, so never act on unsolicited advice. This is general information, not financial advice.
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