Is £500,000 enough to retire on in the UK?

The simplest way to turn a pot into an income is a withdrawal rate. The figure most often quoted is 4% a year: on £500,000 that is £20,000. It is a rule of thumb from historical market data, not a promise — take more and the pot is more likely to run short, take less and it is more likely to last.

On top of that sits the State Pension. The full new State Pension is £241.30 a week in 2026/27, or £12,548 a year, from State Pension age (currently moving from 66 to 67). Together that is about £32,548 a year before tax.

The Retirement Living Standards, published by Pensions UK, describe three lifestyles for a single person: Minimum at £13,900 a year, Moderate at £32,700 and Comfortable at £45,400. A Moderate retirement includes running a car and an overseas holiday each year; Comfortable adds more holidays and more spending on going out.

So £500,000 plus a full State Pension lands near the Moderate line. Reaching the Comfortable line at State Pension age would take a pot of around £821,000 on the same arithmetic.

One thing every headline figure leaves out is tax. The Retirement Living Standards are what people spend after tax, while pension withdrawals and the State Pension are taxable income. Usually 25% of a pension can come out tax-free, so the gross figure you need is higher than the spending figure, but by less than you might fear.

The State Pension does not start when you stop working — it starts at State Pension age. Retire at 60 and the pot has to pay the whole income for seven years. Covering the State Pension's share for those years alone uses about £87,836 of the £500,000.

That leaves roughly £412,164 to produce income for life, or about £16,487 a year at 4%. It is the single most overlooked number in early-retirement planning, and most online calculators leave it out.

Whether a pot is enough is personal. It depends on whether you own your home outright (the benchmarks assume you do), whether you have a partner with their own pension, any defined benefit pension, how many National Insurance years you have, and how long you live.

That is the conversation a regulated adviser has with you. A free RetireReady check puts your own numbers against these benchmarks first, so you start that conversation knowing where you stand.

How these figures are worked out: the yearly spending figures are the Pensions UK Retirement Living Standards (2026), which describe what a single person spends after tax. The full new State Pension is £12,548 a year (£241.30 a week in 2026/27) from age 67. The pot figures divide the shortfall by a 4% yearly withdrawal — a widely quoted rule of thumb, not a guarantee — and add the full State Pension for every year you retire before 67. No investment growth, inflation or tax is modelled. These are national benchmarks, not a projection for you.