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  • I want to know my income will last as long as I need it to

  • Sustaining your pension income for the rest of your life

    Want your pension to pay you an income for your lifetime but not sure how much income you should take to ensure it lasts? The common perception is that you'll need between half and two-thirds of the annual salary you had when you were working, after tax, to maintain your lifestyle in retirement*. Our examples show how contributing more could impact on your pension income.

    *MoneyHelper.org.uk 2025

  • Before you make any decision about what to do at retirement it's important to know where you currently stand. Things like your pension's value, what funds you're invested in and your selected retirement date are essential to help you plan. You can get all of this from our free online services.


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  • How contributing more can impact your pension income

    Here's an example of Susan, aged 40 who has a workplace defined contribution pension.

    Current situation

    Selected retirement age
    68    		 Current pension value
    £100,000     		 Employee contributions
    4%     		 Employer contributions
    6%

    Target income at retirement
    £30,000  

    (Roughly 60% of Susan's current salary)

    		 -
    (Minus)    		  State pension
    £11,973    		 =
    (Equals)

    Required income from workplace pension
    £18,027


    Estimated pension value at 68  25% Tax free cash  Estimated income from pension as annuity  State pension allowance  Annual shortfall/surplus  How long Susan could receive £18,027 as income drawdown 
    £335,484 £83,871 £13,581 £11,973 -£4,446 Until 82


    • Assuming she takes 25% of the estimated total pension pot as a tax-free lump sum at retirement Susan will have £251,613 to draw income from.
    • Based on the current rates this would give Susan £13,581 a year through a lifetime annuity providing her with an overall estimated income of £25,554, a shortfall of £4,446 against her target.

    If she were to take income drawdown at the desired rate her money would run out* after 14 years, or by her 82nd birthday. As there’s a 1 in 4 chance Susan would reach the age of 96 she could be relying solely on the state pension for a considerable portion of her retirement.

    Find out how long your pension may need to last (opens external site in new window).

    *To illustrate the variables and the type of decisions someone might need to take, this assumes that the invested fund does not grow. In reality Susan is likely to keep some or all of the funds invested and might factor some growth into her calculations.

  • Now let’s assume that Susan can contribute a little bit more to her pension. She increases her contributions and her company match the increase +2%.

    Employee contributions
    		Employer contributions  Estimated pension value at 68  25% tax free cash  Estimated income from pension as annuity  State pension allowance  Annual shortfall/surplus  How long Susan could receive £18,027 as income drawdown 
    5% 7% £370,751 £92,688 £15,009 £11,973 -£3,018 Until 83
    6% 8% £406,018 £101,504 £16,437 £11,973 -£1,590 Until 85
    7% 9% £441,285 £110,321 £17,864 £11,973 -£163 Until 86                                   


    The examples above demonstrate the need for Susan to contribute more to her workplace pension to achieve the income levels she expects in retirement. A rise of 3% of her contributions equates to £1,500 of her current salary, or £125 a month. Because her company is matching the contributions +2% in real terms it represents a £250 increase per month.

    Calculations -

    • Monthly payments into Susan's pension pot increase by 2.5% a year to reflect pay rises.
    • Tax relief is included on contributions.
    • Charges of 0.75% a year are taken from Susan's pension pot.
    • Susan's pension investment grows by 5% each year. Her actual investment growth could be higher or lower depending on the performance of the investments in the pension pot.

  • Is there a gap between what you need and what you might get? If there is here are some actions you could consider

    Put more money into your pension

    Putting more money into your pension can help you reach your retirement goals. Find out how much you can top up your pension by and how to do it.

    Topping up your pension

    Reconsider your investment choices

    Making sure you're invested in the right funds is one of the most important parts of retirement planning. So how do your feelings about risk affect how your money is invested?

    Managing your investments

    Combine your pensions

    If you have more than one pension, bringing them together could help you achieve your targets better than if they sit separately.

    Combining your pensions

    Delay taking your pension

    You might consider delaying when you receive your pension. This gives it more time to potentially grow in value. Call us to discuss.

    Contact us

  • Getting financial advice

    It's important to discuss your retirement options with a financial adviser. They'll be able to help you decide on the right thing to do for your personal circumstances. If you don't have a financial adviser we've outlined reasons why you might benefit from using one and how to find one local to you.

    Getting financial advice