What will my total income in retirement be?

When you reach retirement your income is likely to be less and your living costs will change.

To work out if you’ll have enough money to live on in retirement, you’ll need to:

  • find out what you’ll get from your pension pot, the State Pension and any other income you may have
  • work out the tax you’ll pay on your retirement income
  • look at what your living costs are likely to be

If you decide you won’t have enough to live on after you retire, you could put more in your pot now or retire later and delay taking your pension.

Where your income will come from

You’ll most likely have pensions from your employer, personal pensions you set up yourself and the State Pension paid to you by the government.

You might also have other income from:

  • work — if you carry on working for some years
  • benefits — e.g. pension credit, housing benefit, council tax reduction
  • rental income
  • interest from savings or pensioner bonds
  • dividends from investments
  • selling property

Taking money from your pension pot can affect your benefits.

Work out your retirement income

To get an idea of how much you’ll have in retirement, follow these steps:

  1. Check how much is in your pension pot and which pensions you’ve paid into.

  2. Add your pension pot to your State Pension. Check your State Pension online to get a State Pension forecast to find out how much you could get, when you could get it and if you could increase it.

  3. Check what other income you’ll have in retirement and how it might change.

  4. Choose what to do with your pot and shop around to get quotes from providers.

  5. Take away the tax you pay.


You’re 65 and want to work part time until you’re 70. You decide to take 25% of your pot tax free. You invest the rest into an adjustable income and take £4,800 a year.

What you have Amount
Full New State Pension per year £9,339.20
Your total pension pot £100,000
Income per year from working part time £15,000

What you get in your 60s

Income Amount per year
Full New State Pension + £9,339.20
Income from work + £15,000
Money from your adjustable income +£4,800
Income before tax = £29,139.20
Tax you pay - £3,313.84
Your total retirement income in your 60s = £25,825.36

You also have the £25,000 tax-free money to supplement your income.

What you get from 70 onwards

You stop working and decide to take more from your adjustable income investment.

Income Amount per year
Full New State Pension + £9,339.20
Money from your adjustable income + £6,500
Income before tax = £15,839.20
Tax you pay - £653.84
Your total retirement income from 70 onwards = £15,185.36

You also have the £25,000 tax-free money you took at 65 to supplement your income.

Work out how much you’ll need in retirement

  1. Add up all the living costs you have now. You can use the Money Advice Service’s budget planner to help you work out what they are.

  2. Take away these costs from your retirement income. This will give you an idea of whether you’ll have enough money to live off in retirement.

Living costs in retirement

Over the years your needs will change.

For example, you might pay less on:

  • travel – some public transport is free once you reach State Pension age
  • your mortgage – this might be paid off

You might pay more for:

  • energy and water bills – you may spend more time at home
  • care costs

Increase your retirement income

If you don’t think you’ll have enough money for your retirement, you could pay more into your pot now, take your pot later or delay taking the State Pension.

Pay more into your pot

There’s a limit to how much you can pay into your pot and still get tax relief. You can pay in up to your annual allowance. Your allowance changes once you start taking money from your pot.

If you have more than one pot, you can continue to pay into a pot after you start to take money from another. The amount you can pay in drops to a maximum of £4,000 a year once you start taking money from a pot.

This includes your tax relief of 20%. For example, to get a contribution of £10,000 you would only have to pay in £8,000.

You may still be able to pay into the pot you take money from but you won’t get tax relief on these payments.

Take your pot later

You may be able to leave your pot untouched and take it later than the age you agreed with your pension provider (known as your ‘selected retirement age’).

Leaving your money invested for longer and continuing to pay in could give you a higher income when you come to take it.

State Pension

You can delay when you get the State Pension to help increase your income in retirement. This is called deferring the State Pension.

Find out more about ways to boost your pension from the Money Advice Service.