Published and sources checked · Educational clarifications updated · UK tax year 2026/27
Turn the question into an annual budget
Use recent statements to estimate housing, food, utilities, transport and other essentials. Then add the spending that would make retirement enjoyable. Some work costs may disappear; home heating, leisure or travel spending may increase. Keep mortgage or rent costs visible rather than assuming everyone retires without housing payments.
Irregular bills matter too. A £1,200 cost once a year is another £100 a month in a budget. Separate one-off plans, such as replacing a car, from the spending you expect every year. This makes the calculation easier to change without hiding the tradeoffs.
Match income to the years when it starts
List State Pension, workplace pensions, personal pensions and other income with their start dates. A defined benefit pension promises income under its scheme rules; a defined contribution pension is an invested pot whose future income is uncertain. Do not count the same pension as both a pot and a separate income stream.
Get your own State Pension forecast. The full new State Pension is £241.30 a week in 2026/27, equivalent to £12,547.60 over 52 weeks. Your actual forecast may differ; the full published rate is not a promise that everyone will receive that amount. If you stop work before payments begin, the first years of retirement need a separate calculation.
An illustrative income gap
Illustrative, not advice: a household budgets £2,200 a month after tax, or £26,400 a year. Suppose its income available after tax is £18,000. The remaining spending gap is £8,400 a year. A further £6,000 annual income starting later would reduce that gap to £2,400, if spending stayed unchanged.
This arithmetic does not calculate the pension withdrawal needed before tax. It also excludes inflation, investment returns, fees and changes in spending. Use consistent before-tax or after-tax figures throughout a comparison. Our income gap calculator uses before-tax figures and explains its limits.
Allow for uncertainty
A useful plan explores several futures: living longer, higher bills, poor investment performance and unexpected expenses. An average life expectancy is not a deadline for your money. A steady annual budget also does not mean investment returns will be steady.
Check what spending could change if income fell, and what income would continue regardless of investment markets. Revisit the numbers when a pension starts, a mortgage ends or household circumstances change. A calculator is a way to examine assumptions; its result is not confirmation that a particular retirement date is affordable.
Common questions
Is there one pension-pot size that is enough?
No. The same pot supports different plans depending on housing costs, other pensions, retirement age, tax, investment outcomes and spending.
Does a percentage withdrawal guarantee my money will last?
No. A percentage calculation is an illustration. Sustainability depends on returns, inflation, fees, withdrawal timing and how long withdrawals continue.
Sources
Checked 7 October 2026; clarification sources checked 8 October 2026. The linked sources are the authority for rules and eligibility.