How Much Do I Need in a Pension? Savings Targets for 40, 50, and 60

Did you know that 77% of people don’t know how much money they need in retirement? 

Pension planning can feel overwhelming, especially when you’re trying to determine how much money you should have saved and invested by different ages. It’s important to remember that there’s no one-size-fits-all approach to pension saving, but there are some helpful benchmarks and strategies that can keep you on track. 

We’ve compiled some expert guidance on pension savings targets for ages 40, 50, and 60 to help you effectively plan for retirement.

How Much Pension Do I Need to Live Comfortably?

When thinking about how much pension you need to retire comfortably, you need to first determine what comfortable means for you. The Pensions and Lifetime Savings Association (PLSA) has developed three retirement living standards that can help you gauge your retirement goals:

• Minimum: £14,400 per year – this covers all your essentials such as food and utilities, with a little bit left over for social occasions
• Moderate: £31,300 per year – this gives you a more flexible lifestyle, allowing you to eat out a few times per year and have a yearly holiday abroad
• Comfortable: £43,100 per year – this lifestyle allows you to be more spontaneous with your money and enjoy frequent holidays and leisure activities

The above figures apply to single individuals living outside London and include the full new state pension amount, which is £11,973 for the 2025-26 tax year. So, if you’re aiming for a comfortable lifestyle, you’ll need to top up your state pension with an additional annual amount of £31,127 from your private pension scheme or other savings.

If you decide to take your pension flexibly, rather than by buying an annuity, the 4% rule is a popular method for taking money from your pension. It suggests that you withdraw 4% of your total pension in your first year of retirement, and consistently take this same amount but adjust for inflation in the following years. Subject to investment and sequencing risk, this might help your money last for around 30 years in retirement. 

Based on this rule, you would need a pension pot of around £780,000 to reliably draw £43,100 per year. While this amount can seem daunting, it’s a useful target to work towards.  

Pension Savings Benchmarks By Age

Reference: T.Rowe Price, February 2025

Age 40

People often ask us, “how much should I have in my pension at 40”? As a general rule of thumb, you should have saved around 1.5 to 2 times your annual salary by age 40. For example, if you earn £40,000 per year, you should have a pension pot of £60,000-£80,000. 

But if you haven’t saved this amount yet, don’t panic. Now is the perfect time to reconsider your pension strategy. You could still have 25 years left of working before retirement, which gives your savings enough time to grow. 

Age 50

Most people aged 50 are now in their peak earning years. At this stage, the goal is to have at least 4 to 5 times your salary in your pension pot. This equates to £200,000-£250,000 for someone earning £50,000. 

If you’re behind this recommended savings target, now is the time to consider increasing your pension contributions and review your investment strategy. More advice on this below…

Age 60

By age 60, many people are beginning to seriously plan for retirement, so your pension pot should be nearing its final size. As discussed above, to maintain a comfortable retirement income of £43,100 per year, you’ll need a pension pot of around £780,000.

If you’re approaching retirement with a smaller pension pot than expected, you still have options. You could delay your retirement to keep contributing for longer or consider part-time income sources to bridge the gap.

Of course everyone is different, and pension funds may not be the only source of funding in retirement. Therefore, it’s important to look at your wider financial planning to ensure that other assets can dovetail and provide you with the necessary inflows you require in your retirement years.

Top Tips for Boosting Your Pension Savings

• Start early and save money consistently – compound interest means that even small regular contributions will grow significantly over time.
• Leverage employer contributions – if your employer offers a pension scheme, make sure you contribute enough to receive the maximum employer match.
• Top up with lump sums – additional bonuses or inheritance sums can be used to top up your pension pot.
• Track your progress – use online pension and retirement calculators to check whether you’re on track and adjust your strategy as needed.
• Consolidate your pensions – if you’ve had multiple jobs, you might have several small pensions. Consider combining these to manage your savings more efficiently, but check first that you are not giving up any valuable guarantees written into your existing plan(s).
• Seek expert advice – an expert financial planner like Piercefield Oliver can help you create a bespoke pension plan tailored to your circumstances.

Need Help Maximising Your Retirement Savings?

At Piercefield Oliver, we take great pride in helping individuals take control of their financial future. We offer a wide range of expert pension advice and retirement planning services to help you navigate the complexities of pension savings. 

So, if you’re unsure whether your pension is on track, or you wish to explore ways to enhance your retirement income, book a free consultation with one of our financial advisors. We’ll create a strategic financial plan to help you achieve the retirement lifestyle you desire.