Almost nobody has put a number on what they want to spend in retirement. It is the single most useful hour of the whole planning process, and it comes before any conversation about pensions, investments or products.
- A moderate retirement costs about £32,700 a year for one person, £45,400 for a couple.
- All the published standards assume you own your home outright and exclude care costs.
- Only around 23% of workers are on track for the Moderate standard.
- Your own figure should start from twelve months of your actual spending.
- A target income gives the rest of the plan something to aim at.
How much does a comfortable retirement cost in 2026?
Pensions UK publishes the Retirement Living Standards, researched by Loughborough University by asking members of the public what different standards of living actually cost. The 2026 figures, after tax, are:
£22,500 a couple
£45,400 a couple
£62,700 a couple
Two things to hold in mind. All three assume you own your home outright — if you will still be paying a mortgage or rent, add it. And none of them include care costs.
How many people are on track for a moderate retirement?
Pensions UK estimates around 82% of the working population will reach the Minimum standard. Only about 23% are on course for Moderate, and roughly 9% for Comfortable.
That is a national picture, not a prediction about you. But it does explain why "I'll probably be alright" is such a common answer and such a poor plan.
Why will your own retirement income need differ?
These standards describe average households. Yours is not average. The things that move the number most are:
- Housing. Mortgage-free changes everything. So does a mortgage running into your seventies.
- Two people or one. A couple needs roughly 1.4 times what a single person does, not twice — which also means the survivor's position needs planning for.
- The early years. Most people spend noticeably more in the first decade of retirement, while they are active. Spending typically falls in the middle years.
- Whether you still support anyone. Adult children and grandchildren rarely appear in a standard budget.
- Care. Not everyone will need it, but it is the single largest thing a plan can be blindsided by.
How do you work out your own retirement income target?
Start with what you spend now, not what you think you ought to spend. Twelve months of bank statements is the honest version. Then adjust: take out commuting, work clothes, and pension contributions you will no longer be making; add in the travel, hobbies and time you now have to fill.
Most people find the answer is lower than they feared, once the mortgage and the pension contributions come out.
What do you do once you have a target income?
Once you have a target income, the rest of the plan has something to aim at. You can see what the State Pension covers, what your existing pensions add, and what is left to find. That gap — if there is one — is what the plan is for.
Sources: spending figures and the proportion of workers on track are from Pensions UK’s Retirement Living Standards, calculated by the Centre for Research in Social Policy at Loughborough University — see the 2026 update. The Standards describe annual spending, not gross income, and exclude housing costs.
This article is general information, not personal advice. Figures are the Pensions UK Retirement Living Standards for 2026 and are national averages, not a forecast of your own circumstances. The value of investments can fall as well as rise and you may get back less than you invested. The information contained within this article was accurate at the date of publication and is subject to change. Reviewed by Bright Wealth before publication.