5 June 2025
New calculations* from Quilter, the wealth manager and financial adviser, reveal that a single person now needs a pension pot of £682,000 to enjoy a comfortable retirement lifestyle – a decrease from last year’s figure, primarily due to more favourable annuity rates.
These figures are based on the latest update to the Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards, which were refreshed in June 2025 to reflect evolving retirement expectations, updated inflation assumptions, and the new full State Pension.
A single person aiming for a moderate retirement lifestyle will have needed to have built up a pot of £415,000.
UK annuity rates have risen sharply due to rising gilt yields caused by persistent inflation, potential tariff policies, and delays in anticipated interest rate cuts.
The standards define what level of income is needed to fund either a minimum, moderate or comfortable lifestyle in retirement. Quilter’s calculations determine the size of pension pot required to generate those incomes using a 5.9% escalating annuity rate for someone aged 66, assuming no housing costs in retirement.
- A minimum lifestyle covers essentials, including a basic weekly food shop, a week-long UK holiday per year, and little to no discretionary spending.
- A moderate lifestyle allows for a few meals out each month, a two-week European holiday, and more flexibility in spending.
- A comfortable lifestyle includes regular dining out, extended holidays abroad, generous clothing budgets and the ability to support family with gifts or financial help.
For a single person, the 2025 figures are as follows:
|
Retirement Level |
Annual Spending Target |
State Pension |
Income from Pot Needed |
Pot Required (5.9% escalating annuity) |
|
Comfortable |
£43,900 |
£11,973 |
£40,247 (gross) |
£682,000 |
|
Moderate |
£31,700 |
£11,973 |
£24,509 (gross) |
£415,000 |
|
Minimum |
£13,400 |
£11,973 |
£1,634 (gross) |
£28,000 |
For a couple, the new joint pot sizes are:
|
Retirement Level |
Annual Spending Target (joint) |
State Pension (combined) |
Income from Pot Needed (per person) |
Pot Required Per Person (5.9% escalating annuity) |
Combined Pot |
|
Comfortable |
£60,600 |
£23,946 |
£34,732 (gross total) |
£386,000 |
£772,000 |
|
Moderate |
£43,900 |
£23,946 |
£ £24, 295 (gross total) |
£209,000 |
£418,000 |
|
Minimum |
£21,600 |
£23,946 |
£0 |
Covered by State Pension |
N/A |
Jon Greer, head of retirement policy at Quilter, says:
"The cost of achieving a comfortable retirement has fallen this year due to favourable annuity rates. While this is a welcome development for savers approaching retirement, it’s likely to be short-lived.
"As interest rates are expected to fall over the next year, annuity rates will follow suit, meaning the pension pot required to secure the same level of retirement income will increase again.
"Even with this short-term reprieve, the overall cost of a comfortable, or even moderate, retirement remains substantial. These figures serve as an important benchmark for retirement planning, helping individuals understand what’s achievable.
"It’s also worth remembering that these calculations assume retirees are mortgage-free or not renting in later life – an increasingly rare scenario for future generations. And from April 2027, pensions will no longer be exempt from inheritance tax if left untouched at death. Building up a large pot without a strategy could create an avoidable tax liability, making professional advice all the more important."
*All figures rounded to the nearest £1,000. Assumes an escalating income of 3% from age 66 and full new State Pension of £11,973 per person for 2025/26
