According to Pension UK and its Retirement Living Standards report, a single person looking to live a “comfortable” retirement would require around £43,900 a year.

This amount covers needs like bills and groceries while allowing for luxury purchases and a degree of financial freedom. But what does £43,900 a year look like in terms of your pension pot at retirement?

According to PensionsAge, this is where a worrying disparity emerges, especially for those considered high net worth individuals (HNWI).

Keep reading to find out how big a pension fund you’ll need to live your dream lifestyle retirement, and why that amount might be more than you think.

The report finds a worrying gap in the perception of retirement costs and the reality

A recent survey asked UK pension savers with more than £250,000 in assets how much they thought would be required to provide them with a comfortable retirement.

Of those respondents in pre-retirement (aged 55 and above), the average response was around £661,000. Factoring in inflation and increasing life expectancies, though, PensionsAge suggests the figure is likely closer to £1.5 million. That’s a potential shortfall of £840,000.

Across all respondents, 18% believed a pension pot of between £401,000 and £600,000 would suffice, while 13% expected to live comfortably in retirement with just £201,000-£400,000 in their pot.

What’s more, the likely shortfall is even larger for younger savers who could need around £2.5 million in pension savings by the time they retire (again, according to PensionsAge figures).

There are many ways to make up a pension shortfall, and professional financial advice can help

The professional financial advice we provide at The Pension Planner is tailored to your individual circumstances and needs. Broadly, there are some key steps we can help you take to bridge a potential gap.

Here are just three of them.

1. Ensure you maintain your pension contributions

Interestingly, the survey found that most HNWIs are already aware of a potential shortfall, with 69% planning to increase their pension contributions over the next six months.

You’ll want to make full use of your pension’s tax efficiency by contributing up to your Annual Allowance and claiming any additional tax relief you are due.

The Annual Allowance is the maximum amount you can contribute to your pension in a single tax year without facing an additional tax charge. In 2025/26, it stands at £60,000 or 100% of your earnings, whichever is lower. A different allowance might apply, though, if your income exceeds certain thresholds or you have already flexibly accessed your pension.

Be sure to make the most of your allowance and that of your partner, too.

You can claim extra tax relief on pension contributions beyond the standard 20% if you’re a higher- or additional-rate taxpayer. This is done through your self-assessment tax return.

2. Reassess the support you give to ensure it is affordable

According to a recent MoneyAge report, almost half (49%) of UK pension savers want to financially support family members in retirement, but only 28% see this as realistic.

While almost three-quarters (73%) of HNWIs currently provide regular financial help to adult children or grandchildren, 12% are having to dip into their pensions or reduce contributions to do so. This could be adding to retirement strain, increasing the likelihood of a shortfall or of running out of money when it’s needed most.

We can help you think about the retirement you want and plan for the best way to achieve it, alongside providing affordable support to your family.

3. Look to non-pension income to subsidise your retirement

You might opt to defer your State Pension in order to receive a higher amount when you finally decide to take it. And you’ll need to stay on top of pension withdrawals, especially where you’re accessing your fund flexibly. Changes to the economy, including market highs and lows and inflation, can all affect the amounts you draw down, and budgeting is key.

But remember, not all your retirement income will come from your pensions, and changes to IHT rules could mean you need to think about the order in which you access funds.

You might have regular rental income from buy-to-let properties, for example, as well as non-pension investments in ISAs or even Venture Capital Trusts (VCTs). Rental income could help to cover regular expenses, while careful management of investments could help to provide a safety net.

We can help you work out the most tax-efficient way to fund your retirement, so get in touch.

Get in touch

If you need help making up a pension shortfall or you need reassurance that you remain on track to your goals, get in touch. Email info@thepensionplanner.co.uk or call 0800 0787 182.

Please note:

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulations, which are subject to change in the future.