A single person would need a pension pot of £682,000 - down £56,000 on last year - to produce a ‘comfortable’ retirement income, according to calculations by wealth manager Quilter.

Last year a pension pot of £738,000 was required to produce a ‘comfortable’ retirement income - judged this year to be £40,247 per annum.

A single person aiming for a moderate retirement lifestyle will need to have built up a pot of £415,000 this year. 

The company has used data from this year's Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards to calculate the pension pot needed for different types of living retirement living standard.

The widely-used PLSA annual report on the sums needed to support minimum, moderate and comfortable retirement incomes was published this week. 

Quilter’s calculations determined 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.

Quilter says that the pension pot needed for a comfortable living standard is down this year due to higher annuity rates being available compared to last year. A higher State Pension has also boosted retirement income.

UK annuity rates have risen sharply over the past 12 months due to rising gilt yields caused by persistent inflation, potential tariff policies and delays in anticipated interest rate cuts, Quilter said. 

2025 Pension Pot Requirements / Single Person 

2025 Pension Pot Requirements / Couple

Source: Quilter

Retirement living standards are defined by the PLSA as:

• 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.

Jon Greer, head of retirement policy at Quilter, said: “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."