How much do I need to retire?
Work out your own figure from what you spend, when you stop and what other income you will have.
Work out your own figure from what you spend, when you stop and what other income you will have.
Figures like £500,000, £1m or “25 times your spending” describe a typical retiree, and your own figure can be far above or below them.
The number you need depends on four things: what you spend, when you stop, what other income you have, and how long you live. Change any one and the answer moves by hundreds of thousands of pounds. Two people with identical £400,000 pots can end up one comfortable and the other out of money.
Work out what your life costs now, and what it will cost when you stop.
Some costs stop at retirement: commuting, often the mortgage, often the cost of children. Others rise, because time you used to spend at work is now time available to spend money.
A guessed figure that is out by a few hundred pounds a month carries that error through every year of a thirty-year projection.
The free Healthcheck connects your bank read-only and sorts the last few months automatically.
Take someone who wants £3,000 a month after tax from 62, in today's money. That's £36,000 a year.
The full new State Pension is £12,547.60 a year in 2026/27 (£241.30 a week), but not until 67 or 68. So from 62 to 67 they need the whole £36,000 from savings. After that, £36,000 less £12,547.60: about £23,450.
Five years at £36,000 is £180,000 before the State Pension arrives. That gap is the most expensive part of retiring early.
£23,450 a year from 67 to 100 is thirty-three years. At 3% real growth, with each year's money taken at the start of the year, funding that needs roughly £500,000 at 67.
Around £680,000 at 62: £180,000 plus £500,000. Tax, the order of returns and how long they live all move that figure, and retirement cash flow modelling shows by how much.
Retiring five years early costs five years of income plus five years of growth you no longer get plus five more years of drawdown. That is why the stop date is the most powerful number in the plan.
Comes from the 4% withdrawal research. It ignores the State Pension, which is guaranteed for life and rises each year. Include it and the number drops a lot.
Dates from final salary pensions. It starts from what you earned, and what you spend can be far lower. Someone earning £80,000 and living on £40,000 needs far less than the rule suggests.
Figures like this come from national research into the cost of a standard basket of spending. Your own spending, mortgage and children can put you well above or below it.
Run your own spending, other income and stop date forward year by year.
This moves the number most. Every extra year is a year of earning, a year of contributing, a year of growth and one fewer year of drawing — four effects pulling the same way.
This works at both ends. £300 a month less in retirement is roughly £90,000 less capital needed over thirty years. £300 a month more saved between now and then compounds on top. Finding money you were spending without noticing does both jobs at once.
State Pension gaps you can still fill, a deferred scheme from an old job, a rental, a business. Each guaranteed pound reduces what the pot has to produce. Include pensions from jobs you left long ago.
Moving an assumption from 3% to 4% changes a projection far less than moving the stop date by two years, and you do not control it.
The most useful floor is whatever covers your non-negotiable costs from guaranteed income. Housing, food, energy, insurance, council tax: the things that carry on regardless of what markets do. If the State Pension and any defined benefit scheme between them cover that list, everything else you own pays for choices, and a bad year in the markets affects holidays and treats while the essentials stay paid. Work the floor out first, in pounds per month, before you think about the pot at all. Then compare it with your State Pension forecast, which is free on gov.uk, and with any defined benefit pension you are due.
The full new State Pension is £12,547.60 a year in 2026/27 (£241.30 a week). It rises each year, is guaranteed for life, carries no investment risk and cannot run out. For a couple who both qualify in full that is £25,095.20 between them. To generate the same income from a pot at a 4% withdrawal rate you would need about £314,000 each, and even then it would not carry the guarantee. Check your own forecast on gov.uk. Gaps in your National Insurance record reduce it, and some gaps can still be filled with voluntary contributions.
Then two separate problems arrive at once. The first is access: normal minimum pension age is 55 and rises to 57 in April 2028, so if you were born after 6 April 1973 there is a stretch where you have stopped working and cannot touch a pension at all, which has to be funded from ISAs, savings or other income. The second is the bridge. Retiring at 55 means seven more years of drawing before the State Pension arrives than retiring at 62, and those are the most expensive years in any plan because nothing else is contributing to them. Between them, these two problems can mean going at 55 needs a third to a half more capital than going at 62, most of it funding the years before the State Pension.
Only if you intend to sell or downsize, and then only for the amount you would free up. That means the sale price less the cost of wherever you move to, less stamp duty, agents, legal fees and the move itself. A £400,000 house becoming a £300,000 house does not release £100,000. If you do intend to downsize, model it at a realistic figure and a realistic date, using what similar homes near you have sold for. If you do not, leave the house out of the plan.
Start with the free projection. It takes about two minutes, it works in today's money, and it gives you both the shape of the answer and the age your money runs out. Before you run it, find two facts: what you spend, from your bank statements, and what your State Pension forecast says, which is free on gov.uk and takes five minutes. If several parts of the picture are pulling against each other, a business nobody has valued, a stop date you are unsure of, a defined benefit scheme with a penalty for taking it early, that is what the Financial Plan is for.
An hour with a planner on whether the Financial Plan suits your position.
A written plan: every year to age 100 with UK tax applied, each risk measured in years, and your next ninety days.