Pension Gap Calculator
Calculate whether your current pension savings are on track for your target retirement income and find your pension gap.
How Pension Gap Calculator works
How the pension gap is calculated
Step 1: Project your pension pot at retirement using current contributions and growth. Step 2: Calculate the annual income from the pot at a 4% withdrawal rate. Step 3: Add the state pension. Step 4: Compare to target income. The gap is the shortfall in annual income.
Target retirement income benchmarks
The PLSA Retirement Living Standards (2025) suggest: Minimum standard (basic needs covered) = £14,400/year single, £22,400/year couple. Moderate standard (some extras) = £31,300/year single, £43,100/year couple. Comfortable standard = £43,100/year single, £59,000/year couple.
Closing the gap
Options: increase contributions, extend your working life, reduce target income, invest more aggressively (higher risk/return), use salary sacrifice to boost contributions tax-efficiently, or explore other income sources (rental income, inheritance).
Frequently asked questions
How much do I need to retire in the UK?
The PLSA Retirement Living Standards suggest £14,400/year for a basic retirement, £31,300 for moderate, and £43,100 for comfortable (2025 figures, single person). Add state pension (£11,502/year) and you need a pot generating approximately £20,000–32,000/year from private savings for moderate-comfortable.
What is the 4% withdrawal rule?
Withdraw 4% of your pension pot in year one of retirement and adjust for inflation each year. Historically this allows the pot to last 30+ years. At 4%, £500,000 generates £20,000/year. The rule is a guideline — actual safe withdrawal rates depend on asset allocation and sequence of returns.
Can I retire at 60 with £500,000?
At 4% withdrawal: £20,000/year from the pot. Plus state pension from age 66: £11,502/year. Total at 66+: £31,502/year, below the PLSA moderate standard of £31,300. Retiring at 60 means drawing down for 6 years before state pension starts — the pot will be smaller by then. Whether this is sufficient depends on your lifestyle.
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This calculator provides estimates for informational purposes only. It is not a substitute for personalised pension or financial advice. Speak to a regulated financial adviser before making pension decisions.