Pensions are one of the most misunderstood aspects of personal finance. Let's fix that.
The Three Layers of UK Retirement Income
1. State Pension
The full new State Pension in 2026 is £11,502/year (£221.20/week). You need 35 qualifying NI years. Check your forecast at gov.uk/check-state-pension.
2. Workplace Pension
Minimum contribution is 8% of qualifying earnings — 5% from you, 3% from employer. Many employers match more.
3. Personal Pension / SIPP
Ideal for self-employed or topping up. Tax relief at your marginal rate on contributions.
How Much Do You Need?
PLSA Retirement Living Standards:
- Minimum: £14,400/year
- Moderate: £31,300/year
- Comfortable: £43,100/year
The 4% Rule
You can sustainably withdraw 4% of your pot per year over a 30-year retirement. To generate £20,000/year, you need a pot of £500,000.
Key TakeawayFor a moderate retirement (£31,300/year) minus State Pension, you need £19,800/year from your pot — requiring around £495,000 at the 4% rule.
✦ Try the QuidCast Tool
Pension Pot Estimator
Enter your current pot, monthly contribution, years to retirement and expected growth to see your projected income.
🏦 Estimate Your Pension →Boost Your Pension
- Increase contributions by 1% — adds tens of thousands over a career.
- Claim higher-rate tax relief via self-assessment if you're a 40% taxpayer.
- Consolidate old pensions — the average UK worker has 11 jobs.
- Review your fund allocation — defaults are often too cautious for younger savers.