Retirement depends on a number: the point at which the money you have built can pay for the life you want without you working. Two people the same age can be decades apart on that, depending on what they have saved and what they spend. Rules of thumb below give an estimate, not a guarantee.
The test
You can retire when your pensions, savings and any other income can reliably cover your spending for the rest of your life. Two numbers matter: how much your retirement will cost each year, and how much you've built to fund it. Both can change.
What retirement costs
The Pensions and Lifetime Savings Association publishes Retirement Living Standards — research-based estimates of what different retirement lifestyles cost. The latest published figures (2025), for a single person and excluding rent or mortgage, are roughly: minimum around £13,400 a year (essentials plus a little), moderate around £31,700 (more comfort, a car, a European holiday), and comfortable around £43,900 (more freedom and travel). Couples need more in total but meaningfully less per head, because so many costs are shared.
Two adjustments. If you'll still be paying rent or a mortgage in retirement, add your housing cost on top, because the standards assume you will not be. Your own figure can sit between the bands.
The two-step estimate
Once you have a target annual spend, the estimate is two steps. Step one: subtract your guaranteed income — for most people that's the State Pension, worth £241.30 a week (about £12,550 a year) in 2026-27 if you have a full National Insurance record. What's left is the gap your own money has to fill every year. Step two: multiply that gap by 25. That's the rough pot size that could plausibly fund it, based on the old planners' rule of thumb that drawing around 4% of a pot each year has historically tended to last a long retirement. It is a starting point, not a promise.
× 25rule of thumb: your annual income gap, times 25, is a rough pot size to aim for
Count everything guaranteed on the income side, not just the State Pension. A defined-benefit (final salary) pension from an old public-sector or long-service job pays a set income for life, so it belongs with the State Pension in step one, not in the pot. Dependable rental income counts too, at a realistic after-costs figure. The ×25 multiplier only applies to whatever gap is left once every reliable income stream has been subtracted.
Illustrative figures, ignoring tax and investment growth for simplicity. Sam wants a retirement costing £26,000 a year, owns her home by then, and expects a full State Pension.
- Target spend: £26,000 a year.
- State Pension: about £12,500 a year.
- Gap her own money must fill: £26,000 − £12,500 = £13,500 a year.
- Rough pot needed: £13,500 × 25 = £337,500.
One more layer: Sam would like to stop at 60, but her State Pension won't start until 67. Those seven years have no £12,500 floor, so they cost the full £26,000 × 7 = £182,000 from her own savings — on top of funding the years after. Retiring a few years early adds the full cost of those ‘bridge’ years.
Three factors you control
- How much you save. Saving more, sooner, brings the date forward. Employer contributions and tax relief add to what you pay in; our pension reality check explains how.
- How long it grows. Money invested in your thirties has decades to compound; money added at 60 has much less time.
- How much you'll spend. Cutting a target from £30,000 to £26,000 a year removes £4,000 × 25 = £100,000 from the pot you need. Housing costs and debts in retirement also raise the amount you need.
Access ages
You generally can't touch a private or workplace pension until age 55, rising to 57 on 6 April 2028. The State Pension comes later still: State Pension age is currently rising from 66 to 67, completing in April 2028, with a further rise to 68 pencilled in for the mid-2040s. Early retirement therefore often draws on ISAs and other savings first, then private pensions from 57 and the State Pension from 67. ISAs have no access age.
Work out your rough number
- Pick your target annual spend. Start from your current spending, strip out the mortgage, commuting and kids' costs if they'll be gone, sense-check against the Retirement Living Standards, and write a figure down.
- Get your State Pension forecast at gov.uk/check-state-pension; it shows any gaps in your record.
- Gather every pension. Latest statements or app balances for current and old pots — use the free Pension Tracing Service for jobs you've lost track of.
- Do the two-step estimate. Target spend minus guaranteed income, times 25. Compare it with where your pots are heading (statements include projections).
- Compare the result with your target. If there is a gap, the factors above show what can change it; a regulated adviser can help with pension decisions.
If you'd like the whole picture in one place first — pensions alongside debts, savings and protection — the free Financial Freedom Score takes about eight minutes and makes a good starting snapshot.
When to get advice. Working out roughly what you're on track for is coaching. But structuring retirement income — which pot to draw first, in what order, how to handle tax, and how to invest as you approach and enter retirement — is regulated financial advice. Buzz Money Coach does not give regulated advice. Where you need it, we say so and can introduce you to Equity & General, authorised and regulated by the FCA (No. 474163), through Buzz Money Ltd's introducer agreement. The introduction is optional. And if you're over 50 with a defined-contribution pension, book the government's free Pension Wise appointment before making any decisions; it is free and impartial.