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  • Retirement planning explained
    • Getting started
    • Planning for retirement
    • Approaching retirement
    • Already retired
    • Risk explained
    • Delay explained
    • Life expectancy explained
    • Inflation explained
    • State Benefit explained
    • Common questions
    • Glossary
  • Pensions
  • Savings and investments
  • Protection
  • Inheritance planning
  • Tax planning

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Existing Customers

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Help and guides

• Guides to investing

Will it be enough for you to live on?

The state pension scheme pays a pension to many people when they reach retirement age. But on its own, the state pension might not be enough for you to live on.

How much is the State Pension?

In the 2009/10 tax year, basic state pension benefits are:

• £95.25 a week for a single person
• £152.30 a week for a married couple

If a couple both qualify for a full basic state pension, this gives them a combined £190.50 each week. To qualify for the full basic state pension, you must have paid sufficient National Insurance Contributions.

Additional State Pension

You might also be entitled to an additional state pension – either from the SERPS (State Earnings-Related Pension Scheme), or the State Second Pension. The amount of any additional pension you get depends on how much your earnings were.

You can get a forecast of your state pension benefits at the Directgov website.

How much will you need?

As a benchmark, many people aim for a retirement income of roughly two thirds of their final salary when they retire. After all, your living costs will probably have reduced - your mortgage will be repaid, your travel costs will be lower and your children will have left home.

So if you earn £750 a week, you should be aiming for a total pension of roughly £500 a week. You can deduct your estimated state pension benefits from this figure to give you an idea of the personal pension you need to save towards.

Don’t forget that the amount of money you need depends to a great extent on what you plan to do with your time. Travelling the world could cost more than staying at home. And remember to take account of inflation and salary increases – they could make a big difference to your target pension.