How much money do you need to retire in the UK?

As well as using these simple calculations, other things, like your health, whether you own your own home or expect to rent, how much you plan to spend on travel, hobbies and social activities, and whether you may need to support family members financially, will influence the amount you’ll need. 

You'll also need to consider when you want to retire. Retiring earlier means your savings will need to last longer, while you'll have fewer years to contribute; retiring at 55 rather than 67 could mean funding an additional 12 years without State Pension income.  

While a certain amount of money might feel enough today, the cost of everyday expenses like food, energy and travel is likely to rise over time. If you're retiring in 20 or 30 years, your savings and retirement income may need to stretch much further than you expect, so factoring inflation into your plans can help give you a more realistic picture of what you'll need.

The Pensions Policy Institute estimates there are around 3.3 million lost pension pots in the UK, worth over £31 billion.

In the modern world, people move jobs more regularly and – with the pace of life increasing all the time – it’s easy to lose track of our paperwork and forget things like previous payroll numbers and pension providers. Bringing your pension pots together can help with this, as well as saving you the hassle of lots of extra admin. 

A pension remains one of the most tax efficient ways for you to save for retirement. The UK government contributes 20% basic rate tax relief of the total amount invested in your pension. To pay in a total of £1,000 to your pension, you only need to contribute £800, then the government will top up the other £200. If you pay income tax above the basic rate, you can claim even more tax relief through your tax return or by writing to HMRC. 

In most cases, you can contribute as much as you earn each year, up to £60,000, or £3,600 if you don't have earnings.

Also, if you’re part of a workplace ‘auto-enrolment’ pension scheme, many employers will match the contributions you make (up to a point), so making the most of this is another great way to boost your retirement pot over time. 

Paying as much as you can afford into your pension through regular contributions and topping up when you can – such as adding some of your company bonus – can really help to build up your retirement savings. The more time your investments have to grow, the better. 

If you move employer don’t forget to bring your old workplace pension to Royal Bank of Scotland so you can see it alongside your other Royal Bank of Scotland accounts. It’s easier to manage and much more rewarding to be able to see your retirement savings alongside your other savings.