There is no one figure that answers this question, as everybody’s different. But what you can do is think about how you want your later life to look and then ask the experts. At Ascent Financial Planning, we can help you turn retirement goals into numbers you can work with. Read on to learn more about the kind of pension pot required to retire.

What does “enough to retire” really mean?

Good question. How much do you need to retire comfortably? The response will depend on your personal view of retirement. Do you want at least one holiday a year? A luxury car? Or simply enough to pay the bills and keep the house maintained? The important thing is to be realistic about your retirement income: think about not just what you want (your lifestyle goals) but what you need.

Retirement savings targets: target income: UK retirement benchmarks explained

According to the PLSA's Retirement Living Standards (RLS): 

• Couples with a minimum vision of retirement would need £21,600 per year, while singletons would need £13,400.
• A couple wanting a moderate lifestyle would need £43,900 per year. One person wanting the same standard of retirement would need £31,700.
• When it comes to a comfortable lifestyle, the figures are £60,600 for a two-person household and £43,900 for a one-person household.

Minimum, moderate or comfortable: how do you see your retirement?   

How to calculate the pension pot you’ll need

One of the easiest ways to calculate the amount of pension pot you’ll need is to use a retirement calculator. There are many on the internet and it’s worth trying a few to get consistent figures, but of course, speaking directly with us will give you a clearer picture of your options.

Factoring in the State Pension, savings, ISAs, and property

Do remember that your personal pension may not be the only pot of money you have. Savings, ISAs and property could all go towards your retirement funds, in addition to the state pension. 

How inflation affects your retirement income

Inflation can quietly eat away at the buying power of your money and affect the value of your savings if not accounted for. So, what can you do?

• Invest part of your retirement nest egg in growth assets that historically outpace inflation. This usually means stocks (equities).
• Remember that the state pension has the triple lock, meaning it rises each year by inflation, wage growth, or 2.5% (whichever is highest).
• Keep your withdrawal strategy flexible (if you have one).

Inflation can also work with taxation, with inflation pushing you into higher tax brackets over time if thresholds don’t move.

The value of investments and pensions and the income they produce can fall as well as rise. You may get back less than you invested. Past performance is not a reliable indicator of future performance.

Next steps

Here at Ascent Financial Planning, based in North Wales, we’re ready to help you find your own personal retirement number so you can look forward to a happy later life. We’ll help you draw up your personal roadmap to retirement so you have peace of mind. We’ll then help keep you on track with regular progress checks. Ready to talk retirement? Book a consultation now.