Retirement planning can sometimes feel overwhelming, and many people are unsure about how much they need, whether they're saving enough, or even where to start.

Traditionally, to maintain your current lifestyle in retirement, you should aim for an annual pension that pays an income of around two-thirds (66%) of your final working salary. But it's not always that simple.

For example, if you earn £60,000 before you retire, you should target a retirement income of around £40,000 per year.

Because your living costs typically drop in retirement, for example little or no mortgage, no commuting costs, no more pension contributions, this two-thirds target generally sustains your pre-retirement standard of living.

According to the Pensions and Lifetime Savings Association – UK Retirement Living Standards 2025, a single person will need around £31,700 a year to achieve a moderate standard of living in retirement, and £43,900 for a comfortable one.

And with the full State Pension paying a maximum of £12,547.60 for the 2026/27 tax year, there's a gap that needs addressing.

Tax reliefs referred to are those applied under current legislation, which may change. The availability and value of any tax relief will depend on your individual circumstances.

To bridge the gap between the state pension and the income people want and need, most people will save for retirement by investing in either a workplace pension or a personal pension or both.

If you want to get a better idea of the total personal pension pot you'll need, the “Rule of 25” can help – this means multiplying your annual gap by 25, as shown in the table below.

If you won't be eligible for a full state pension, you'll need to adjust your calculation.