Ask the internet how much to save for retirement and you'll get rules of thumb: half your age as a percentage of salary, eight times your salary by 60, ten percent and hope. None of them can answer the question you actually asked - what does MY retirement cost per month? So we built a calculator that works backwards from the retirement you want and solves for the saving. This article walks through what it finds for one realistic saver, and what that reveals for everyone else.
The real answer, for a real saver
Meet our saver: 35 years old, wants £30,000 a year after tax, in today's money, from age 60 until age 92. They have a £40,000 pension, £10,000 in ISAs and £5,000 of cash, and they'll get a full State Pension from 67. Assume 5% investment growth, 0.5% charges and 2.5% inflation. A forward-running pension calculator would ask what they can afford and tell them what they'd get. Running the maths backwards instead - simulating every year of the retirement, tax included, and searching for the smallest contribution that funds all of it - gives one number:
The solved answer
£2,168
a month into the pension, from 35 to 60
Pot at retirement
£1,337,209
in the money of 2051, not today's
It funds
£30,000
a year after tax, inflation-linked, to age 92
Two things about that pot figure before it frightens you. It's in the money of 2051 - at 2.5% inflation, £1.34m then buys what roughly £720,000 buys today. And it's the minimum: the plan lands near zero at 92, on purpose, because that's what "just enough" means. Anything you'd like left over - for later care costs, or to leave behind - is extra on top.
The same retirement has three different prices
Here's the part no rule of thumb can see. In retirement you'll hold several pots - pension, ISA, cash - and the order you empty them is a tax decision. Pension withdrawals are taxed as income; ISA withdrawals aren't. Solve the same retirement three times, once per withdrawal strategy, and you get three different monthly prices:
Pension first
£2,168
a month - cheapest here; lifetime tax £1,021,480
Fill the basic-rate band
£2,189
a month - lifetime tax £1,129,591
ISA first
£2,219
a month - the careful-feeling instinct, and the priciest
The spread is £51 a month, which sounds small until you multiply it out: over £15,000 of extra saving across 25 years, for exactly the same retirement. And notice which strategy loses. Spending the accessible ISA first and "protecting" the pension feels prudent, but it wastes your personal allowance in the early years and leaves a big pension to be emptied later at higher rates. Which order wins depends on your own mix of pots - that's why the calculator solves all three on your numbers rather than assuming.
What waiting costs
Run the identical retirement from different starting ages - same pots on day one, same £30,000 target - and the price of delay is stark:
Start at 25
£1,615
a month - 35 years of compounding
Start at 30
£1,852
a month
Start at 35
£2,168
a month - our saver
Start at 40
£2,634
a month
Start at 45
£3,404
a month - double the age-25 price
“The retirement doesn't get more expensive. The shortcut through it - compounding - gets shorter.”
If the number is too big: the levers, priced
£2,168 a month is a lot of money. If your solved number is out of reach, these are what the levers are actually worth, each tested on our saver with everything else held still:
- Retire later. At 63 instead of 60 the bill drops from £2,168 to £1,692 - £476 a month cheaper. At 65 it's £1,417. Each extra working year helps twice: one more year of saving, one fewer year of spending.
- Want a little less. £25,000 a year instead of £30,000 costs £1,498 a month - £670 cheaper. The reverse is just as steep: £40,000 a year costs £3,619.
- Growth is a hope, not a lever. At 6% growth the answer is £1,511; at 4% it's £3,046. A single percentage point either side moves the bill by roughly £800-£900 a month - which is exactly why you should test your plan at a rate lower than the one you're hoping for.
Solve it on your numbers
Your age, your pots, your target - the calculator solves the monthly figure under all three withdrawal strategies and shows every assumption it made, all changeable. Free, no sign-up.
Find your monthly numberWhy the rules of thumb get this wrong
"Half your age as a percentage of salary" prices the saving off your income, but retirement is priced off your spending - a £60k earner who lives on £28k needs far less than the rule says, and a £40k earner supporting a family may need more. "Eight times salary by 60" has the same flaw plus another: it ignores the State Pension, which quietly covers £12,548 a year of the target from 67 and is the reason the years from 60 to 67 are the expensive ones. Rules of thumb are fine for checking you're roughly sane. They can't price your retirement, because they never ask what it costs.
What this number can't promise
The solved figure assumes growth arrives smoothly at the rate you chose. Real returns arrive in a jumble, and a bad run early in retirement does more damage than the same average spread evenly - the industry calls it sequence risk, and no fixed-rate model shows it. The model is also one person, not a couple (two personal allowances change the tax picture), and it treats ISA withdrawals as entirely tax-free, which is right for an ISA and generous for a general investment account. Treat the answer as this year's planning figure, re-run it annually, and let the 4%-growth version scare you a little - that's what it's for.
Then keep it honest, year after year
A monthly target only works if your household can hold it through a mortgage, career breaks and everything else. Quidworth projects the whole picture together, decades ahead. Free, no card, no adverts.
Create your free accountFrequently asked questions
How much should I save each month to retire at 60 in the UK?
For a 35-year-old who wants £30,000 a year (after tax, in today's money) from 60 to 92, starting with a £40,000 pension, £10,000 in ISAs and £5,000 cash, the solved answer is £2,168 a month into a pension - assuming 5% growth, 2.5% inflation and a full State Pension from 67. Your own number moves with every one of those inputs, which is why a calculator that solves for it beats any rule of thumb.
Why do different withdrawal strategies need different monthly savings?
Income tax is charged on pension withdrawals but not on ISA withdrawals, so the order you empty your pots in retirement changes how much of your money survives to be spent - and therefore how much you must put in. In our worked example the gap between the best and worst order is £51 a month, which is over £15,000 of extra saving across 25 years for drawing the same income.
Is it too late to start saving for retirement at 45?
No, but the price of waiting is real: the same £30,000-a-year retirement at 60 costs our saver £2,168 a month starting at 35 and £3,404 a month starting at 45. If the monthly figure is out of reach, the honest levers are retiring later - each extra year of work helps twice, adding a year of saving and removing a year of spending - trimming the income target, or a combination.
Can I retire at 60 if my money is in a pension?
Yes - pensions can normally be accessed from 55 today, rising to 57 from April 2028, so at 60 your pension is available. The gap to plan for is the State Pension, which doesn't start until 67 for most people now working. Between 60 and 67 your own pots carry the whole income, which is why the early retirement years are the expensive ones.
Projections are estimates for education, not financial advice. Understanding your projections.
