How much money do you need for retirement?

Recent news has highlighted that people across the UK aren’t saving enough for retirement.

This revelation stems from Pensions UK’s recently updated Retirement Living Standards. These standards – which reflect the cost of living standards, not the actual income retirees will need – are based on research conducted by Pension UK, which uses the Minimum Income Standards (MIS) as a baseline, combined with focus group research.

This research stipulates three categories of Retirement Living Standards, with the following definitions:

But is this really “enough”?

By Retirement Living Standards’ definition, £28,324-£31,060 a year only accounts for “having what you need in order to have the opportunities and choices necessary to participate in society”. Although everyone’s retirement planning and goals will be different, at Attivo, we believe that everyone should have the opportunity to enjoy their retirement to the full.

More specifically, we defined having “enough” in our Lifestyle Financial Planning Guide as being able to plan for the lifestyle you want without the risk of running out of money too soon, or reaching the end of your life with money left over that you can’t spend/that could be heavily taxed before reaching your loved ones.

The question is, what can you do to help make that happen?

Five ways to help you achieve “enough” money for your retirement:

1. Review what you already have

Before you make any changes to your current situation, it’s a good idea to review what you already have in place to help you make more informed decisions around your next steps.

Things to consider here include:

1. Reviewing your existing workplace and/or personal pensions

As a first step, take some time to go back through all your existing pensions from the various companies you’ve worked for. If you have a personal or private pension, such as a Self Invested Personal Pension (SIPP), now is also a good time to see how this is performing.

If you think you may have a “lost” pension (you certainly wouldn’t be alone), it may help to read our guidance on how to find a lost pension here.

2. Check your State Pension entitlement

The current State Pension amount is £241.30 a week. You can check your state pension age here to see when you’ll be eligible to receive your state pension from the government. This is rising from 66 to 67 between 6 April 2026 and 6 April 2028 – and another increase from 67 to 68 is being planned for 2044-2046.

3. Review your pension investment strategy

Take some time to look at how your pensions are currently invested, and whether this is working well towards your retirement plan and goals. Ask yourself:

• Am I taking the right level of risk for me and what I want to achieve?
• Am I comfortable with the risk level I’m taking right now?
• Do my investments match up with when I’m planning to retire?
• Are the investments growing in line with my expectations?
• Should I consider diversifying my pension?
• Does this investment align with how I want to access my pension later on?

By answering these questions, you can consider how you may want to adjust your pension investments to keep you on track for your planned retirement.

2. Build your retirement savings

Once you have an idea of what your pension income might be, you can start to think about how you can build on it to help you achieve your retirement goals, such as:

1. Increasing your pension contributions

Putting more into your workplace or private pension – whether as a regular contribution or a lump sum – can be a great way to boost your pension ready for retirement. Different employers may have different rules and benefits around workplace pensions (some may even up their contributions alongside yours), so be sure to speak with them about your options.

It’s important to remember however to leave yourself enough money to support your current lifestyle in the lead up.

2. Make the most of tax-efficient allowances

There are several tax allowances and reliefs available that you can use to build your retirement savings more efficiently. For example, pension tax relief can boost the value of your contributions, while ISAs can offer a flexible, tax-efficient way to save alongside your pension. Depending on your circumstances, it may also be worth reviewing whether you can use any unused pension allowances from previous years.

3. Rethink when and how you retire

When and how you retire can have an impact on your retirement income. While most people in the UK aim to retire around the age of 65, there’s an increasing trend of choosing to retire later, or even undertake phased retirement, to help supplement retirement income (it’s worth noting here that your salary and your pension will be totalled to determine how much tax you pay above your Personal Allowance). With the average life expectancy increasing, you could also choose to defer your pension until you are ready to retire fully.

4. Manage your retirement income and outgoings

One of the top considerations for managing your retirement income is how you plan to access that income. Generally, there are four main options available here:

1. Take some or all of your pension as a lump sum.
2. Buy an annuity (a financial product that turns some or all of your pension into a guaranteed income, usually for life).
3. Income drawdown (a way of taking income while keeping your pension invested).
4. A combination of the above (for example, using part of your pension pot to buy an annuity, and then leave the remaining money in drawdown).

Each has its own benefits and drawbacks, but the main consideration is which – or which combination – will be the most effective solution to help you achieve your dream retirement.

Managing your outgoings is also essential. As we explore in our Guide to Retirement, different stages of retirement are often characterised by different kinds of spending – from holidays and hobbies in the earlier years to care costs later down the line. Tools like cash flow modelling can help you manage this by creating a realistic budget and providing a helpful picture of your income and expenses (though it’s not without its limitations*).

5. Get expert support

As this article demonstrates, there’s a lot to think about when it comes to making sure you have enough money for retirement – which, understandably, can very quickly become overwhelming.

This is where having the support of a Lifestyle Financial Planner is particularly beneficial. In fact, at Attivo, “how much money do you need for retirement?” – or indeed, “can I afford to retire?” – is one of the most common questions our planners are asked by their clients.

In short, a Lifestyle Financial Planner can help you to:

• Understand what you already have in place and whether it supports your retirement goals.
• Explore ways to build your retirement savings, including pension contributions and tax-efficient allowances.
• Consider when and how you may want to retire, including phased retirement options.
• Plan how to access your pension income in a way that suits your lifestyle.
• Use cash flow modelling to help understand your future income, outgoings and long-term affordability.
• Feel more confident about whether you’re on track for the retirement you want.